Nifty to find support in 5807-5757 range: Anil Manghnani

Technical analyst Anil Manghnani of Modern Shares & Stock Brokers told CNBC-TV18 that the pullback seen in the market yesterday was on the back of fund inflow and overall strength of the market.

"One can see this as first sign of minor pullback," he added. The Nifty is seen finding support in the 5807-5757 range. If the Nifty drifts to these levels one should use it as buying opportunity, he recommended. Below is the edited transcript of Manghnani’s interview with CNBC-TV18. Q: What did you read into yesterday’s pullback? Does it appear that the market might be preparing for a slightly deeper pullback? A: It is too early to say. We have had a decent rally and it is not a sharp fall, it is a drift down which is expected given the amount of money that is coming in and the overall strength of the market. It is just a first sign of, maybe this is minor pullback. There is a lot of support at lower levels maybe 5807-5757 range. I don’t think I see this as a bigger fall than that. If it goes to that range also it is an opportunity to buy, at least the first pullback after a new high or a new 52 week high is always viable. So, just accept it that the market has rallied, it is drifting down lower and use the lower end, like I said 5807-5757 as a buying opportunity. Q: What about those two stocks we were just talking about, ITC and Hindustan Unilever? How much pressure are they putting on the market? A: I would say clearly HUL is putting more pressure than ITC. If you see the last move in ITC, it’s still made a new life high and then it is correcting, so it is too early to say whether that is the top. But in HUL you have sort of a lower top. After doing Rs 580 and falling to about Rs 510, now it is done a sort of a lower top at Rs 550. So, HUL might be the more concerning one for the Nifty and the market. For HUL, Rs 510 remains a crucial level, if it takes that out then it can slip all the way to Rs 460. It will still be a buy at Rs 460. So HUL will be the problem for the market, whereas ITC is just making a new life high and it is too early to call it a top. Q: What about yesterdays star, Tata Motors? How much upside do you see here? A: It is a little early but it does appear to be a new move. A couple of months back Rs 289-290 was the previous high, I would like to see that taken out. But it is a call where you can hedge against something like a Maruti or some of the other autos, which are now starting to correct and sell that and buy this, So it could probably be a pair trade. But once it takes out Rs 290, it is headed to Rs 300-310 range in the immediate short-term. It is a buy with a stop of around Rs 280. Q: A lot of the PSU banks have reversed the rally of the last few days. Are you beginning to see exhaustion on the Bank Nifty as well? A: I won’t say exhaustion, but just like the Nifty is finding resistance at 5,950, even the Bank Nifty has hit a key level closer to 12,500. So, it is probably taking a pause and pulling back. I wouldn’t immediately try to go out and call it a sell. In a deeper fall even if it were to come to maybe 11,900, which was the breakout level, it would still remain a buy at that range of say 11,900-12,000 in the immediate short-term. Q: What do you see on the chart of Bharti Airtel now? A: I am surprised of the move from Rs 240 to Rs 340 but having hit a major range, there are lot of averages both on the weekly front and the daily front at Rs 330-340. In the short-term, it will be difficult for the stock to cross that range. So, maybe again a pullback to Rs 300-290 shouldn’t be ruled out. When it is back in those levels again, it becomes a trading buy. It might remain in a range having already moved so much in the last three or four months. _PAGEBREAK_ Q: What about JSW Steel, how would you trade that? A: Surprisingly the stock has been falling all week, so definitely it has broken all the momentum indicators. Now maybe because it has fallen five to six days in a row, it might give you a pullback. But the pullback, maybe to the Rs 738-750 range looks like a sell again, maybe a stop at Rs 758. I think eventually the stock should head closer to Rs 700-710. Q: At this point what is looking like the weakest link for the market? Even if the market is consolidating, which one is pinching it the most? A: I think it would be the high beta. The ones that rallied the last would fall first, just because they rallied on improved sentiment, when we took out the 5815 previous high. Metals for sure were the last to rally. After that it would have to be infrastructure, maybe a little bit of realty. Realty not so much because they were rallying right throughout. But the infrastructure and definitely the metals names would tend to get hit first because they just rallied on sentiment rather than on genuine foreign institutional investors (FIIs) or Domestic Institutional Investors (DIIs) buying.