Don't see signs of weakness in Nifty yet: Anil Manghnani

The Indian market has been very volatile over the last many sessions. In an interview to CNBC-TV18, Anil Manghnani, Modern Shares & Stock Brokers says the first weakness sign would only come if the Nifty closes below the 20-day Exponential Moving Average (EMA) at 5,928. "There is no concrete evidence to suggest that it is a short right now," he adds.

According to him, if the market has to go up to 6,100, next key level, banking, which has been the biggest participant in the entire rally, has to contribute. "At 12,800, the Bank Nifty is near the highs of the current move. But if it can take 12,800 out then the next targets open up closer to 13,000-13,200," he asserts. Below is an edited transcript of his interview on CNBC-TV18 Q: Can we start by talking about the CNX-IT and Infosys' chart? A: It has been pretty subdued for the last two-three months. It has not participated at all in the rally. The first level is about Rs 2,475. It is a falling trend line. If it can take that out on Infosys then it opens up upside of Rs 2,550-2,600. Also read: Buy Infosys for long term: Sukhani Watch out for Rs 2,475 especially being a weekly close also. I think the other ones could benefit as well. If you look at HCL Tech, if it opens around Rs 650, it is only Rs 10 from its recent highs. While the CNX-IT may have underperformed, HCL Tech is doing pretty well. TCS, which has been very subdued after hitting Rs 1,400 plus, could benefit from these numbers. Overall, it might help some of the other stocks also and not just Infosys. Q: Its weightage on the index ofcourse has gone down to about 6-7 percent, but just as a combined entity, do you think technology can now do something special for the Nifty? A: It is possible. If you look at what happened over the last week, the other sector that had not done anything in this entire rally was oil and gas. That really caught fire with the fuel price hike talks; Oil and Natural Gas Corporation (ONGC), which bear the heavy subsidy burden, started rallying. So, one had already got another beaten down or non-performing sector hold up the market over the last three days, while it was fairly sluggish. Now one has something else this morning. Only concern is we should not be running into a stage where the last sector starts to move. That could be an early sign of distribution. So, it is good to see that some of the other sectors now are giving participation. Q: Bank Nifty is the one that seems to have gone a bit sluggish these last few sessions. Is that dragging the market? Do you see signs of pressure building there? A: I do not know if that is a fair statement. If I remember correctly, yesterday stocks like Axis Bank, Yes Bank did well. At 12,800, the Bank Nifty is near the highs of the current move. So, 12,800 is a level, but if it can take this out then the next targets open up closer to 13,000-13,200. There is no concrete evidence to suggest that it is a short right now. I still think if the market has to go up to 6,100, next key level, then the banking will still do well or need to perform. It is not a sluggish sector like IT and oil and gas that can take it up singly. I think you will need banking, which has been the biggest participant in this entire rally, to continue to contribute. So, I would not give up on banking right now. Even if I am talking about the Nifty, the first weakness sign would only come if it closes below the 20-day Exponential Moving Average (EMA) at 5,928. Although it is sluggish and there are signs of fatigue, there is no clear sell signal yet on the charts.