Nifty may test 4965 if it crosses 4880: Anil Manghnani

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Nifty may test 4965 if it crosses 4880: Anil Manghnani

Anil Manghnani of Modern Shares & Stock Brokers says, the Nifty might cross 4,860-4,880. “If it crosses 4,880 then the next logical target to watch out for would be about 4,965,” 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 Kotak Mahindra See messages about Kotak Mahindra Kotak Mahindra BSE | NSE 29/05/12 Are Mutual Funds betting on Kotak Mahindra? Other Stocks in this news Oriental Bank of Commerce | Bharat Heavy Electricals | Infosys |

Yesterday, the Nifty rallied over 100 points. However, Anil Manghnani of Modern Shares & Stock Brokers is not surprised by yesterday's move. "Last week, although I said the overall trend remains negative, there was a move up to 4,860-4,880," he adds.

According to him, the Nifty might cross 4,860-4,880. "If it crosses 4,880 then the next logical target to watch out for would be about 4,965," he adds.

Also read: Stay away from Nifty, be stock specific, says Sudarshan Sukhani

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

Q: You have been quite cautious on the market. Did yesterday look like a suckers rally or because of the sheer underperformance the market has had it could tear away a bit?

A: Last week, although I said the overall trend remains negative, there was a move up to 4,860-4,880. So, I am not surprised by yesterday's move. The way the US markets have been moving that has surprised most of us. In addition to being a global rally, there was a move up on the cards. So, I am not surprised we have come here.

Can we cross 4,860-4,880? There is a possibility. The reason I say that is typically over the last year or so whenever we have had this nice 500-600 points on the Nifty, there has been a lot of bullishness and a lot of buoyancy in the markets where people have called higher levels. That is where they have got caught.

But this time around most of the analysts are still talking about 4,100-4,200-4,300 range. So, maybe because so many people are negative, it might stretch more on the upside. Get more people positive. When you hear a lot of voices starting talking about 5,200-5,300, then I think the market tends to surprise on the downside. So, if it crosses 4,880 then the next logical target to watch out for would be about 4,965.

Q: How do you approach the banks? Would you take profits or initiate shorts there or do you think the bank nifty might still have a 4-5% rally from here?

A: We talked about 7,700-7,800 a couple of weeks back. That has held and it has bounced. It is right at the 50-day moving average (DMA) at about 8,700 or so. The Nifty is also at 50-DMA-4,860 to 4,880.

If just the Nifty can stretch out, even the Bank Nifty might head closer to about 9,100. But starting from there then I think you to open up shorts. I don't think all the banks are going to rally at the same time. I think many have already moved up quite substantially. So, they would already start to find resistance at the current levels before the actual Bank Nifty tops out.

Q: You are bearish on names like Kotak Mahindra Bank and Oriental Bank of Commerce.

A: Many of them have already bounced, they may top out before the index itself tops out. I think Rs 468 to 483 is a key resistance zone for Kotak. Overall, I don't like Kotak from longer-term point of view.

I think just like some of the bigger banks have gone and hit their major levels be it an ICICI Bank, Axis bank and SBI, stocks like Kotak, HDFC, HDFC Bank haven't done the same move on the downside. I think Kotak needs to start its next leg on the downside soon. So, with a stop of Rs 484, initially I am just looking at Rs 450-440, but eventually it will head lower.

OBC is a case where the stock really collapsed. Now, it has had a good bounce. So, the first bounce normally is the shorting opportunity. I would believe between Rs 225-237, it will find lot of resistance. It should head back to about Rs 205.