Nifty may test 5,180 if it closes above 5,083: Sharekhan

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See previous views by Rohit Srivastava See what other Experts & Brokerages are saying about Reliance See messages about Reliance Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty? Other Stocks in this news ITC |

The markets have made a fine start to the week. Both the Sensex and the Nifty were trading strong in the middle of the day. However, the Nifty is facing a stiff resistance around the 5100 mark. It tested 5,100 on the upside earlier in the day but was unable to pick up the momentum to break it decisively. So, where are the markets headed from here?

In an interview with CNBC-TV18, Rohit Srivastava, Fund Manager - Protech Managed Futures Accounts, Sharekhan gave a technical perspective on the markets and also his picks among the heavyweight stocks.

Here is a verbatim transcript of the exclusive interview with Rohit Srivastava on CNBC-TV18. Also watch the accompanying video.

Q: 5,100 - is it unrealistic to say that by December we could perhaps look at 5,500-5,600 just taking a perspective right up to December only?

A: 5,500-5,600 might sound a little too much. We are at an inflection point which means if you do stay at these levels till the end of the day above 17,100 on the Sensex, above 5,050-5,080 on the Nifty, it would be fair to be able to call closer to 5,200-5,300. 5,300 may become a possibility then which would be closer to 17,800 to 18,000.

That's an open case but we still do not have a clear confirmation that it is happening. We will have to watch today's close to confirm that that's a possibility on the cards.

Q: 5,180 was the previous high, right. Is that technically important?

A: It is. But sometimes we are able to see on the wave structure and based on support levels that hold out that there is potential for upside and then once you see a risk reward you start playing for it and then figure out later on whether it turns out to be true or not.
So, from that perspective as long as we have not fallen below 15,560 that was a potential support from where we have moved up.

And now the whole thing is, are you going to stay above the recent highs or marginally above the recent highs which is around 17,100 or 5,083 exactly, which we saw last week on the Nifty.
So if we do stay above these levels and close above that by the end of the day it potentially tells you that there is a good chance the market would try and test the previous high which was close to 5,180. There is also potential that it might take that out.

Q: You have got three-four stocks for us, stocks that are not on the watch out and do not have to be fundamentally the greatest but strong technical momentum?

A: I wouldn't recommend anything of that sort especially because when you speak to the media, a lot of people who are not just traders but investors who are listening, if somebody ends up buying a stock like that and tomorrow it's on the way down, it hits a stop loss they most probably do not get out. That's our experience with retail investors and that means they end up getting stuck probably forever.

So generally I do not like recommending such stocks while people might trade in them, I think at a broad level one should really stay away from trading such counters.

Q: Give us the strongest technical pick in the heavies, in the Sensex?

A: I think Reliance today looks like the strongest one, making new highs. So it has potential to go up to Rs 2,250. That's probably the best heavy stock. Probably some of the FMCG names like ITC which has some good short-term momentum could see further upside.