Anu Jain vice president of IIFL Private Wealth Management says that the market is now in the best series it has had in many months now. She picks Wipro from the IT sector, which began the big burst in the market, and says, “I would play Wipro with a one month or a three week target, and since, its results season, would be cautious and use the dips to buy into it.” As the market saw a move in cement stocks, she suggests, “Among all the names,HCC still makes a trading buy.”
While real estate has been the dark horse this series of the market, Jain says, “The market has overbought the sector and it is dangerous to get in at this level. However, if one was to play as a trader, one can look at dips though I would stay away at the moment.” On the auto sector, she feels, “One would kind of watch it and then wait for a dip for a fresh entry.”
She also says that incase of a pullback in the Nifty, “You should look out for 5,550-5,574 levels, according to the retracement theory.” She further adds that the market is overbought and prefers to “sit aside for few days and see if the market can cross 5,800 which is a keen resistance.”
Below is a verbatim transcript of Anu Jain’s interview with CNBC-TV18’s Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.
Q: What have you made of probably our best series in many months?
A: Yes, it has been our best series in many months. The courtesy the derivative position that we had of call and puts which were un-winded as the market started moving up, which is the added impetus to the market. Now, we are overbought and it’s time to take at least a larger chunk of the profits which people are holding. I would like to sit aside for few days, see if the market can cross 5,800 which is a keen resistance. You have crossed the 200th day; there are reasons to pause if not correct.
Q: How much of a correction would you expect? What levels would you watch in case of some kind of a pullback in the Nifty?
A: According to the retracement theory, you should look out for 5,550-5,574 levels. However, copybook chart patterns would say that it should be expected whether its news driven, result driven and also the timing – whether it happens in a couple of days or over a period of series is something nobody knows however it is highly probable to happen. The only reason I am saying sit on the sides is if 5,800 were to hold because of flows which we saw last September then one would have to change one’s mind.
Q: Do we have a trend change in place or is this just a very sharp rally from oversold ground?
A: The first sign is that it’s an oversold rally because you saw the put writing which had happened at various levels get un-winded. Along with that there are longs on the Nifty future which take place. Once you cross 5,555-5,600, which the last 200 or 150 points on the Nifty that are more driven by that than anything else. There has been fresh buying which is conclusive but that you cannot see in the broader market anymore. I cannot see the small-cap giving too reliable buy signals to put money at this level.
Q: What is the threat of retracement here because most traders are working with pretty shallow stop losses right now at least on the Nifty?
A: We are not entering in too many positions right now, the stop losses are pretty close by and for whatever positions we are holding for goods which we bought at lower levels. The trailing stop losses are being raised up everyday, so that in case of any reversal, you do not lose any kind of big money. However, at the same time though the market is overbought, specially on the banking side there is no kind of reversal yet on the cards, the trend is only getting stronger whether it’s State Bank of India, HDFC Bank, IndusInd Bank. There is no reason to either completely book out or to even consider shorts at the moment. Hence, it’s only when you see a reversal presumption, short kind of a situation building up, one would have to wait, and look for signals to get into kind of reverse trade there.
Q: The big burst started with IT. What is your take on Wipro?
A: Wipro hasn’t done what the others have done and its time that it would probably move up. If you look at two month high, its closer to Rs 467, yesterday it closed at Rs 472, with a stop loss of about Rs 461. I would play this as a one month or a three week target for Rs 510 that is roughly about 10% from here. Its results season, so, I would be cautious and probably use the dips to buy into it.
Q: We saw quite a move in cement stocks, any thoughts on any of them technically?
A: If we were to look at Ambuja which did about 8%; it’s overbought for sure. The 200 day moving average is about Rs 130, it’s close to Rs 150 so crossed that way back. I would play at the same way as for the rest of the market. I would keep a trailing stop loss of Rs 146.5, if that keeps gets hit I would get out of it if I am holding. For any kind of fresh buying, look at dips till Rs 139 to get into it. The relative strength index (RSI) is positive, so momentum can take it higher. However, I wouldn’t want to get into a stock that has already moved so much at this juncture.
It is similar with ACC that has moved 3.5% and can move up. I would again keep a stop loss here of about Rs 1,050. Pure momentum can take it to about Rs 1,134. Hence, similarly I would wait for dips to about Rs 990 odd to get into it. JP Associates if you want to look at it from the cement side, similar story; momentum can take it to about Rs 94 and would play with a stop loss which is probably about 1.5% from where it is trading right now.
Q: Some of the midcaps or liquid midcaps have also started moving, even from infrastructure names like IVRCL, Hindustan Construction Company.
A: You have seen IVRCL pull up from Rs 74 to Rs 83 odd levels. You have seen IRB move from Rs 190 to closer to Rs 215 to Rs 216 levels. HCC has moves the last owing to the negative news flow. Among all the names, HCC still makes a trading buy, close at about Rs 37.70, the momentum will really either step in when Rs 38 is crossed, if it crosses that then it could attempt Rs 40 to Rs 40.20 kind of a dash. Otherwise, any retracement till about Rs 37 to Rs 36.80, which should be bought into if one has the risk appetite to get into such a sector. I would say probably because it’s an expiry day and oversold things would still run up. HCC can do a dash even today. Hence, probably for expiry, maybe after expiry, it would settle down back again.
Q: The dark horse this series has been real estate. Is there anything that you would buy from there?
A: They have all done their bit. So, if you look at DLF, Indiabulls Real Estate, they have really dashed up once from the lower level. Unitech too has retraced. Out of the pack, the strongest start pattern one of them would be DLF. So, where it has been, it’s run back and I would probably at current levels just hold it with the trailing stop loss of about Rs 257, that can dash up higher because the next resistance is at about Rs 270 and is not too far off.
Hence, at this juncture to get in would be difficult. It is the same with Indiabulls Real Estate, around that Rs 121 levels there is resistance, it has crossed that and come back, it is crisscrossing those levels. Therefore, if it holds Rs 121, it can do another 4% to 5%. However, at this time when the market has overbought a sector that is kind of one of the weakest, given up and overbought, along with the market being overbought, it is dangerous to get in at this level. If one was to play as a trader, one can look at dips however I would stay away at the moment.
Q: What about names like TVS Motors, Ashok Leyland that had been beaten down quite a bit over the start of the year and have staged a smart recovery in the March series?
A: All of them have done their first round and there is a possibility of them doing more, especially, on a day like this when its expiry and the final short positions have to be cut. If you look at Ashok Leyland, essentially, it is around those Rs 58 to Rs 59 levels, comes back to about Rs 57 or Rs 56. It can go up to Rs 60 to Rs 60.5, there is going to be strong resistance. On the other hand, if it dips down to about Rs 53.5 there would be a lot of buying. So, the zone that it has fallen down to right up to Rs 44 to Rs 45 is definitely that kind of panic is out, hence, there would be fresh buying closer to Rs 52 to Rs 53 levels.
I think that would happen even the same if I have to look into a stock like TVS Motor given a buy on it a couple of days back, it looks good but its definitely got resistance around Rs 63 to Rs 64 levels. Therefore, it has done its bit from that Rs 55 odd levels where it’s moved up now to Rs 59 odd but to cross Rs 63 to Rs 64, it would take some efforts. Even on the large-cap, you have seen M&M do that kind of a pullback, Maruti is attempting that so it can happen. Auto in fact was the last leg to move in the interest sensitive. So, you may see at least some more covering happening on these counters but they are all close to resistances, hence, one would kind of watch it, close positions if one gets that 2% to 3% more from here and then wait for a dip for a fresh entry.
Tags: NSE,
BSE,
Sensex,
Nifty,
Market,
,
Anu Jain,
IIFL Private Wealth Management,
Udayan Mukherjee ,
Mitali Mukherjee,
Wipro,
State Bank of India,
HDFC Bank,
IndusInd Bank,
Ambuja,
ACC,
JP Associates
