Nifty may test 4860-4880 before falling: Anil Manghnani

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Nifty may test 4860-4880 before falling: Anil Manghnani

The Indian market has been subdued over the last few sessions. Anil Manghnani of Modern Shares & Stock Brokers says, there is still a possibility of the Nifty going to 4,860-4,880 and then probably the next leg down will start.

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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 Reliance See messages about Reliance Reliance BSE | NSE 29/05/12 Are Mutual Funds betting on Reliance? Other Stocks in this news GAIL India | VIP Industries | Sun TV Network |

The Indian market has been subdued over the last few sessions. Anil Manghnani of Modern Shares & Stock Brokers says, there is still a possibility of the Nifty going to 4,860-4,880 and then probably the next leg down will start. "Till the market doesn't really break down, we would have to expect that those levels are still possible," he adds.

According to him, the Indian market is getting enough support from the global markets with the way the S&P and the Dow have behaved in the last few months. "I still would not give up on the market right now, although overall I believe the trend is down," he adds.

Also read: Cheap valuations reason behind India upgrade, says Credit Suisse

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

Q: How is it looking for the index? Is there still potential with that long trade or do you think it's played out in the short-term?

A: The level still remains 4,860-4,880. I guess till the market doesn't really break down, we would have to expect that those levels are still possible.

I think you are getting enough support from the global markets with the way the S&P and the Dow have behaved in the last few months. Even in the recent past, they have just continued to move higher.

The volumes are still poor. After that 400-point rally, the follow up hasn't been there. Although some stocks have followed up, but there is no movement in the Nifty.

The volumes are less in the index futures. Also, the gap, the premium between the spot and the futures is so low that it shows that the market is devoid of too much interest.

I think maybe we need some more people actually trading the market, a bigger premium on the futures to suggest that the market has a lot of legs. But I still would not give up on the market right now, although overall I believe the trend is down.

I still believe that there is a possibility that we do go to 4,860-4,880 and then probably start the next leg down. So, it is a little difficult right now, but I think more action remains stock specific rather than the Nifty.

Q: What are the chances that for another few weeks we actually trade within the boundaries of the range- 4,530 and 4,800 plus level?

A: It's a possibility, but I wouldn't give too much weightage to that. If you look at the last few months, the movements have been sharp, whether it's been up or down, you have got sharp moves. I doubt we will we trade in a range.

If we go to 4,880 then you should start the next leg on the downside. I would not go with the range-bound trading. I think volatility will creep in at some point.

Q: Oil is becoming a pressure point for the market. Reliance , ONGC, even GAIL, what do you see on those charts?

A: I think Reliance is the key one for this market. Rs 700-705 is a major 100-month moving average. So, the more it trades below it, the bigger problem for the market because it opens a major downside at Rs 630-620.

I think GAIL is still okay. I mean the stock bounced from a good support, now it's again retracing. But it's got lot of support between Rs 350-365. So, actually I would go and buy GAIL if it fell to that range, even from an investment point of view.