Short-term steam may push Nifty to 4700-4710: Brics Sec

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Short-term steam may push Nifty to 4700-4710: Brics Sec

Technical Analyst at Brics Securities, Abhijit Paul, tells CNBC-TV18 that some steam in the short-term could give the Nifty a rally to 4700-4710 levels.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Abhijit Paul See what other Experts & Brokerages are saying about Coal India See messages about Coal India

Technical Analyst at Brics Securities, Abhijit Paul, tells CNBC-TV18 that some steam in the short-term could give the Nifty a rally to 4700-4710 levels. However, his main concern is the negative sentiment in the market.

From a medium-term perspective, Paul hopes the Nifty will move above the 4800 mark and sustain that level. "Nifty above 4,800 will mean a higher high, which will bring in some optimism across the sectors," he said.

Below is and edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.

Q: What is the trading strategy on the Nifty assuming there is to be a little bit of a pullback today?

A: Nifty has managed to give a pretty good bounce back; a good show of strength in yesterday trade. It seems that there is some short-term steam still left for a possible upside of 4,700-4,710. But the main concern hereon is the sentiment which is still weak across all timeframes. We have seen bouncebacks in the range of 5-8% do come, but they don't last.

From a medium-term point of view, I would like to see the Nifty sustain above 4,800, that will mean a higher high, which will bring in some optimism across the sectors. But for the weak ahead, I am looking at 4,700-4,710, or probably 50 points more in the range of 4,750-4,760.

Q: How is the chart of Reliance looking now?

A: Reliance has been a big underperforming stock for quite sometime and that's something everyone would have told by now. But the thing is its struggling to move into a short-term uptrend. The sentiment across the board is weak for the stock, so the obvious breakout level is close to Rs 760-765.

But keeping in mind that there is lot of sentiment, that too very negative sentiment, it can bounce back. From a medium to long-term perspective, it's still in a weak phase and the level to watch out is Rs 620-625. But one can see an upside first close to the range of Rs 745-755 first.

Q: Two stocks that moved in the opposite direction from the natural resources space is Sesa Goa and Coal India .

A: Coal India is one stock which looks good from a short-term point of view. The stock has struggled for quite sometime and has found support close to Rs 294-295. With yesterday's 4% move, which was backed by good cash market volumes as well, it is trying to move into short-term uptrend. Once it manages to sustain above Rs 350, it's likely that the stock will extent further up. From a short-term point of view, one can look to go long on this stock for an upside target of Rs 325-330.

Sesa Goa on the other hand has been a weak stock. Whenever the market attempts a bounce back, this stock fails to do so. Still in a weak phase, there is lack of clarity in terms of the underlying trend of the stock. So Sesa Goa is one stock one should look to stay away from.

Q: Jain Irrigation has been looking quite strong; even pre-expiry the stock was looking pretty solid?

A: I don't track the stock that often, but it's been beaten down quite badly. It has managed a short-term bounce, but it is very obviously still in a very weak phase. One can look to trade a bounce back to the tune of 8-10%, but nothing more than that. It needs to do a lot to move back to an uptrend across all timeframes. When the market is down 24% for the year and you have largecap stocks down close to 50%, it makes no sense to look into this stock right now.