Bourses await breakout as cement cos lead: Anil Manghnani

Anil Manghnani of Modern Shares & Stock Brokers, explains to CNBC-TV18 that the market's next break-out would be above 5,150. He terms the performance of cement stocks as a case of playing catch-up after reaching lows in previous sessions.

Below is an edited transcript of the interview on CNBC-TV18. Also watch the accompanying video.

Q: The markets have bravely chugged on in the green despite some bad macros. Would you advise on long positions? What is your call for the day and for the week?

A: The initial call was from 4,800-5,100. Now that the market has made such a big move, it has to be given time to pause and allow investors to take stock of the news flows. The levels of 5100-5125 where the market fell on Monday is a key level, no doubt.

I think the next big trigger for the market would either be at 5150 or 5300 and the fall is closer to 4990-4950. So the market is probably in a no-trade zone right now stuck at a very tight range, but yes, I think the next break-out would be above 5,150.

I would rather wait for a pullback and buy when the market falls rather than buy during the breakout because your stop loss doesn't become too big. I think when you tend to buy during breakouts the stop-losses become quite big.

Q: The cement stocks led the Nifty today. What do the charts tell you in terms of distribution and the price action? Do you think there is some underlying strength in these charts?

A: I think, maybe except for Ambuja which bounced back earlier, ACC, India Cements and rest were unable to stage a rebound with the rest of the market from a low of maybe Rs 1,100 or so. ACC, till Monday or even this morning, was available closer to Rs 1,140 4% from the recent lows whereas a lot of other stocks are up 10-15-20% from recent lows.

So I think it is play a little bit of catch up, no doubt. I don’t think it is based much on news. The market is looking for fresh ideas right now.

Q: Anything in the midcap segment and have the charts indicated any breakout at all at least for the shorter-term?

A: This is a risky segment. Gas stocks like Petronet LNG, GSPL and IGL post Andhra Pradesh court ruling, staged a big bang but have now come off from those highs. So yes, the trade is a bit risky. A rebound is due and I wouldn’t mind looking at IGL with a stop just below Rs 222 and for GSPL, the stop would be around Rs 62-61.