Nifty may head towards 5365: Darashaw

The Indian market has been firm over the last many sessions. Today, the Nifty has crossed the 5,200 mark.

In an interview to CNBC-TV18, Regan F Homavazir of Darashaw says, the Nifty is likely to head towards 5,365. “Now to get on to any significant downside, you will have to break the psychological level of 5,000. In the event the 5,000 level does not break, we will see significant upsides,” he adds. Also read: Nifty may touch 5400 in July, 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: How significant is this break past 5,200 technically? A: We have tried to break above 5,200 twice earlier and now we are trading above it. It only suggests that all supply that was supposed to be absorbed stands absorbed. We are now likely to head towards 5,365. That is the next supply point. The Nifty could move up on a sustainable uptrend. Q: How is this tying in with global market technicals, especially on indices like the S&P or even a Hang Seng in Asia? A: The Hang Seng and the Dow are showing very neutral charts. They are not suggesting that they will move higher significantly from here, but the Dow is certainly going to achieve a target of 13,000 very soon. Q: What are medium-term technicals telling you now? A: Let’s look at it step by step. First and foremost, now to get on to any significant downside, you will have to break the psychological level of 5,000. At 5,000, the market has found a lot of buying. So, only below 5000 can you start projecting any significant downsides. So, 5,000 is first then it would be 4,800. In the event the 5,000 level does not break, we will see significant upsides. Q: A lot of your peers have been pointing out that it’s still the Bank Nifty that will lead any pointers for the market and where it’s breaking. Would you agree with that? What kind of targets would you work with there? A: Bank Nifty is something that is very neutral inspite of the upmove and the down move that we have seen in the recent past. However, you might as well look at its components. Now, while we say that HDFC Bank would be one of our top picks, we are looking at HDFC Bank moving to a target of over Rs 700, so HDFC is one. At the same time, we are also looking at Kotak Bank. We believe Kotak Bank too will move to a target of Rs 750. Also, importantly HDFC Limited is a very important stock to look at it at this point. The upside potential for HDFC Limited is Rs 1,000. Q: You have been skeptical about the market for quite well. Has the medium-term picture changed for the market? A: Two things to point out. While we discussed the Nifty the last time at about 4,850, we said that 5,171 is where the Nifty is likely to head. Now, while 5,171 and 5,200 is the resistance zone, which was earlier there, today the market is trading above it. So, we will have to start working with multiple levels. For the medium-term downtrend to ensue we will have to break 5,000. That in the current scenario does not look likely because the on going momentum is more or less likely to head the Nifty to about 5,365. Q: What about the currency market? Do you think the rupee will move in tandem with the strength that you expect to see on the equity markets? A: The rupee has met our worse case scenario of about 56.50. It has exceeded that by going upto 57.20. We are expecting the rupee to strengthen very significantly, once it moves past 54.85. Whether the rupee trades at 52 or 53 is something that we will have to decide on. But we are expecting the rupee to strengthen in due course. Other important things that need to be pointed out on the components of the Nifty would be Grasim. Grasim is something that we continue to be bullish on. We are expecting Grasim to go upto Rs 3,200. That’s our first target. Q: What about the chart of Tata Motors? A: Tata Motors is very neutral. Today you have to take a very neutral stance on Tata Motors. If it sustains above Rs 200, the charts are looking fine. However, only below Rs 200, the downsides will look like they are about to accelerate. Above Rs 200, the charts are neutral because we have a large gap on Tata Motors which is around Rs 270. So, there is supply at that price point. Q: And crude, how is that chart looking like to you, after the break to about USD 90 per barrel on Brent? A: On NYMEX, the crude is trading at about USD 80 per barrel. We are expecting it to head towards USD 91-92 per barrel in due course.