Nifty may crash to 4300-4500 by 2012-end: Anil Manghnani

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Nifty may crash to 4300-4500 by 2012-end: Anil Manghnani

The Nifty has seen a sharp rally so far in 2012. Anil Manghnani, Modern Shares & Stock Brokers says, the market is a little over done now on the upside and stock should start correcting very soon. “A lot of the good news is in the price already. I think this is a good time to start taking some profits,” he adds.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Anil Manghnani See what other Experts & Brokerages are saying about IVRCL See messages about IVRCL

The Nifty has seen a sharp rally so far in 2012. Anil Manghnani, Modern Shares & Stock Brokers says, the market is a little over done now on the upside and stock should start correcting very soon. "A lot of the good news is in the price already. I think this is a good time to start taking some profits," he adds.

According to him, in the next correction, infrastructure and midcaps would be the first thing to buy rather than largecaps.

He further says, 2012 is going to be a volatile year. "I am playing for a view that by the end of the year we will actually crash to 4,300-4,500 and that 6,300 top will probably come somewhere in the mid next year," he adds.

Also read: Nifty is in a bull market, must cross 6300, says Sudarshan Sukhani

Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying videos.

Q: What is your view on the market now?

A: I am still working on the theory that the market is a little over done now on the upside and stock should start correcting very soon. If you take the high of 6,338 and the lower 4,531, I think a 50% retracement, which most people tend to track, comes around the levels of 5,434 or so.

Also, you have got your 20-month moving average at about 5,455. So, even though we are above 5,400, a lot of hurdle still remains in this zone. I truly believe that a lot of us are ignoring the Brent prices. The gap between the NYMEX and Brent now is again becoming USD 18-19. For India, that's a big problem.

Yes, the market is being driven by liquidity, but some other factors may come in and bite us soon. There is so much being talked about Greece, which was a non factor itself. The plan didn't really excite the American markets that much. So, a lot of the good news is in the price already. Personally, I think this is a good time now to atleast start taking some profits, if not a lot.

Q: How do you play the infrastructure now, what stands out from that space?

A: A lot of them have moved up. Most of them are at major technical levels. In this sharp rally, some of the names like IVRCL have created a pattern on the chart which suggests now you would buy every fall. But I don't think this is the right time to buy them. But as a whole, as a pack, midcaps infrastructure names have suggested that even if the market had to go back to 4,500-4,300, these stocks may not go and test their lows or at the worst they would do that, they wouldn't go and make new lows.

If the market were to correct now, it will be more largecap correction rather than midcap. So, yes, midcap because they have rallied will have a pullback, but this rally clearly has suggested that may be the worst is over. If you are looking at the next bull run, which I am not looking at this year, but into mid next year, I think midcap will lead. So, for now book some profits. But in the next correction, infrastructure and midcaps would be the first thing to buy rather than largecaps.

Q: You have got a buy on Petronet LNG today.

A: Stocks like ACC , Ambuja and Cairn are going to new highs. That is surprising, given that the market is still way away from the 6,300 mark. But there are enough stocks now starting to make new highs. I think Petronet is setting up for that. I am putting a target of Rs 185, which is the previous high.

From an investment call also, this stock will now take out that high eventually and head to about Rs 200. So, it's one of those poll stocks, which did very well last year, did not lose it's momentum in the correction and now probably setting up for a new move.