Nifty may cross 5450 in current upmove: Anil Manghnani

He further says although the fuel price has been pushed back, there may be some hope of reforms. "The market generally perceives Mr. Chidambaram to be pro-market. So, there is always hope that 5,450 may be taken out this time around," he adds.

Also read: Trend is up; see Nifty in 5400-5450 band, says Sudarshan Sukhani

Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Sonia Shenoy.

Q: Do you think the Nifty will be able to take out its previous high of 5,450 in this upmove?

A: That would be the ideal scenario, for a particular reason — the Dow Theory of higher tops, higher bottoms. If you just look at three-four months, you have two higher bottoms at 4,770 and then at 5,032 and then again 5,215. Similarly, you have two higher tops at 5,350 and 5,450. So, for the uptrend, logically you will need to cross that 5,450. It is possible.

There are a few confusing charts, when I look at the dollar or the euro and even some of the charts like crude. But, overall, I think if this whole global rally sustains, although it is beginning to defy some logic, but if it sustains, it will definitely fuel India.

I think now with the parliament logjam out of the way, there may be some hopes of reforms. Although the fuel price has been pushed back, there may be some hope of reforms. The market generally perceives Mr. Chidambaram to be pro-market. So, there is always hope that 5,450 may be taken out this time around.

Q: Because of the liquidity gush that one is expecting, would you buy into the dip that any of these metal stocks have seen or would you still be cautious?

A: I’ll still be cautious because this is a different story altogether. While the ECB bond buying doesn’t have much to do with India, but it is fueling the rally, it has nothing to do with Coalgate scam. So, these stocks are falling purely based on some internal problem or domestic issues that won't go away that easily.

The gush of liquidity has been coming for three months now, but still metals have been falling. So, it clearly tells you money is not flowing into that sector. Why should it flow into now? So I’ll still probably say metal per se is still a sell on rise for me.

Q: Where would you keep a stop loss in case of a long trade, below which you will start to worry about the uptrend again?

A: I think that will come quite far. If you look at the trend line that we spoke about couple of weeks back that we held around 5,200, that trend line now is somewhere close to 5,250. Yes, it is an upward sloping line. So, it will keep getting higher.

For people, who are following technicals, it is the line that connects the three bottoms of 4,770, 5,032 and 5,215. So, if you have a chart just keep that as your trend-line. Any day it breaks below that trend line then that’s your stop. That’s a little far to talk about right now. But that will be the only thing that will probably dent the overall uptrend, which clearly is trying to make higher tops and higher bottoms right now.

Get the best expert advice for queries on investments in equity, debt, gold, mutual funds, real estate here .