Nifty may end December F&O series at 6070-6120: IIFL

In an interview to CNBC-TV18, Anu Jain of IIFL Private Wealth Management shared her reading of the market from a technical perspective. She expects the December F&O series to expire around 6,070-6,120 levels.

Weak sectors like public sector banks, energy, power and infrastructure are likely to recover and start performing well now. Also read: Ajay Srivastava sees Nifty at 6350 if govt wins FDI vote "The CNX Infra is poised to do 4-5 percent move. CNX Energy has showed that it is bottoming out so that would also pull up. So, power stocks will also contribute to that level," she elaborated. Below is the edited transcript of Jain's interview with CNBC-TV18. Q: How is it looking for you technically? Is it looking like that 6000 target is doable? A: Yes absolutely. We were looking at the November ending with the highest point and it did follow up with that. Also, we were expecting the Bank Nifty to perform without the public sector undertakings (PSUs) contributing, so we had set a target of about 12,600. It has now tested 12,000 plus levels, so we have revised our stop loss from 11,250 to 11,530. The target has been raised to13,100 on the Bank Nifty. It is now time for PSUs to start performing and we will see increased performance along with the private banks. There are other sectors also which are looking good on the charts. The CNX Infra, which hasn’t done much, is poised to do 4-5 percent move. If Bharat Heavy Electricals (BHEL) and Larsen and Toubro perform along with it, then it is a very good indicator that Nifty can pull up 3-4 percent. CNX Energy has showed that it is bottoming out so that would probably also pull up. So, power stocks will also contribute to that level. All in all, weaker sectors will start recovering the strength and stronger sectors are going to sustain. The Nifty looks poised for 6,070-6,120 for December expiry. Q: Are there any significant technical levels that you can think of while trading or is it just a momentum market and these levels that you are talking about are not significant technical levels as such? A: The main significant level now would be a support of 5,650 where we grinded for a very long time and have broken out of it, so on the lower side that would be a significant level. On the upper side, the only significant level is the previous high, which is around 6,300. Now, you are into a zone where you are basically positively biased towards about 6,300. For this expiry a 3-4 percent would be safe to assume and anything big bang would be only depending on some political news which we can not build into the charts. I would be a buyer at every dip, if we get any dip, on any bad news up to 5,650. The significant level is the new high which would be about 6,300 and one should poise oneself towards it. It is going to happen probably early next year but it is definitely now showing on the charts. Q: Is there greater confidence about the downside risks for the market as well? Have we made a new base for ourselves in this up move? At what point would you switch around this long trade that you are talking about? A: 5,650 for me is a point where my trade would change. So if we were to break 5,650 this time for whatever reasons, I would close all longs and wait for an opportunity to short or probably short immediately. As for anybody who is looking today, even 5,780-5,800 to get into a momentum play for trading or for investment that could be just less than a percent or a percent stop loss would be fine. But overall the scenario changes if 5,650 get broken. Q: Two big movers from outside the index were Suzlon Energy and Unitech, what is your view on those? A: Unitech is moving because that whole sector has a very positive bias. So, whether it is Housing Development Infrastructure Ltd (HDIL), Indiabulls Real Estate, all of them are moving in the same fashion. Unitech continues to be a hold if it does not break Rs 30.91. It can move up to about Rs 34 because that is where the whole sector is looking poised. Unitech wouldn’t be my top pick within that sector. I would probably choose Indiabulls Real Estate as a top pick, if I had to play that kind of beta and that is a better pick, although Unitech is poised for about Rs 34. For Suzlon it is in an F&O band and we have seen it move. Technically, if it holds Rs 19 then it is definitely poised for at least Rs 21. These are beta stocks, which move very fast, so Rs 21 seems to be on the card. Q: You have picked Oriental Bank of Commerce from the banks; what is the trade there? A: It almost closed at the 12 month high. It scaled up to Rs 335, closed at about Rs 337 and I think Rs 328 should be a stop loss. It is a good point to get into this bank because the breakout is closer to Rs 390-389. But if you are looking at a trading target probably for about two-three weeks then about Rs 364, which is a 10 percent move in a month, it looks good for it. So I would pick it up from here to about Rs 328, all dips should be bought into. Stay tuned for more..