Uptrend intact till Nifty holds 4950-5000: Anil Manghnani

However, from a positional trader's point of view of 5,000-4,950 remain key support levels. "Till we don’t break that range you would have to believe that the uptrend, which we started a week or so ago is still very much intact," he added.

For the short-run, Manghnani sees the upside capped for the Nifty at 5,300 levels. He further pointed out that globally, commodities and currencies had reached oversold levels and hence a seeing a bounce back now, but one would not call this bounce back as start of a big summer rally.

Below is the edited transcript of Manghnani’s interview with CNBC-TV18. Also watch the accompanying video.

Q: How are you trading now? Yesterday it was a bit of a setback on the Nifty.

A: I guess after a 375 point move if you do get a pullback I don’t think anybody should be overly surprised. It has been a sharp move on the upside and we have been talking about 5,100-5,150 range being a tricky one for the markets. So, no surprise, a little bit of a pullback. Even if you have targets higher than 5150 the market is going to pause or even correct at every resistance zone, it’s not going to be a one-way move.

There is so much news flow out there. There should be no surprise on the pullback, but I think interestingly where we are poised right now. If you take the Nifty and you look at all the tops from February to April you clearly had a downward sloping trend line when you connect 5,630-5,500-5,400 and so on that got taken out at 5,090 a couple of days back.

Now on the pullback, yesterday being a downward sloping line that number keeps getting lower. It was at about 5057, which is where we just about closed yesterday. Today it’s at about 5,045. For the day trader specifically you watch for 5045 as a key support today, but from a positional trade I still believe 5,000-4,950 remains the key support. Till you don’t break that range you would have to believe that the uptrend, which we started a week or so ago is still very much intact.

Q: Any confidence over the course of the last 15 days that the market may have a stronger base in place because some of your global technical peers point out that this dip if it comes could be the potential opportunity of a big rally coming for global equity markets?

A: For now it’s a little early. If I had to cap the upside in the short-run, although I know 5,150 is a major hurdle for the Nifty, but for now I will have to look at it as just a technical pullback. I would cap the upside at about 5,300. Even if you look at the Dow and the S&P they are still playing catch up.

They have had quite a reasonable fall and now I would call it a technical pullback where maybe the S&P can stretch to about 1,345-1,362 range. I don’t believe that’s a start now. It’s too early to call this as a start of a big summer rally. I just believe most of the commodities be it crude or currencies had reached way oversold levels. They needed to bounce back and that’s what we are seeing across the globe now.

Q: Do you have a trading strategy on Sintex this morning?

A: Yes, it’s a risky stock. It’s been badly bruised and beaten down, but I just feel that maybe it might just play catch up to the rest of the market. If the Nifty were to even hold steady this stock could even go back to about Rs 63.

It is not a big stop, but with Rs 54 as your stop you can play for a trading bounce. It is little bit risky, but I am going for something that hasn’t really moved. If you look at the rest of the market banking, realty and power stocks they have all run up so much that your risk reward ratio doesn’t fit. So, this is a little less risky stock because the stop loss is so close.

Q: How would you approach the Bank Nifty going into next week because it’s going to be as important for the Bank Nifty as it is for the index itself?

A: It has had a great run, 9,000 odd on the Bank Nifty right upto 10,200, so no surprise, you saw some profit taking. As I explained for the Nifty, where you had a downward sloping line, after it broke out it’s come in now close right at that line.

Unfortunately, for the Bank Nifty after breaking out a couple of days back above that downward sloping trend line also, it’s gone and cracked again below that trend line that’s not a great sign.

But I still believe the lower end maybe 9755 and right upto 9616 that’s the corresponding level to 5,000-4,950 on the Nifty. As long as it’s above 9,600 in any fall you see it as a buying opportunity. If it starts to take out 9,600 then there will be certain concerns for the Bank Nifty also.