Indian Financial Markets: Nifty may see 5400 post consolidation: Edelweiss Sec

Friday, August 10, 2012

Nifty may see 5400 post consolidation: Edelweiss Sec

Thu, Aug 09, 2012 at 09:59

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Nifty may see 5400 post consolidation: Edelweiss SecThe Indian market has been strong over the last few sessions. In an interview to CNBC-TV18, Atul Badkar of Edelweiss Securities says, it doesn't look like the Nifty is in a hurry to stop. "I think there is some consolidation. We may probably taper back towards 5,300. It looks like we will go towards the 5,400 sooner or later," he adds. . Share . Email . Print . A+A-

It is very evident that the current rally is liquidity driven.Atul Badkar

Analyst Edelweiss Securities

The Indian market has been strong over the last few sessions. In an interview to CNBC-TV18, Atul Badkar of Edelweiss Securities says, it doesn't look like the Nifty is in a hurry to stop. "I think there is some consolidation. We may probably taper back towards 5,300. It looks like we will go towards the 5,400 sooner or later," he adds.

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Below is the edited transcript of his interview with Udayan Mukherjee and Sonia Shenoy.

Q: Would you take your profits off the table now, get a little cautious, after the movements that you have seen so far?

A: Judging by the last nine days, where we have seen the index move up close to 6% from the expiry of the last month, it doesn’t look like we are in a hurry to stop. I think there is some consolidation. We may probably taper back towards 5,300. It looks like we will go towards the 5,400 sooner or later.

It is very evident that this is liquidity driven. If you look at the open interest across sectors, since expiry day, there has been short covering with price rises. So, at this point in time, I do not know whether you want to jump in to catch the next leg, but you definitely do not want to take any shorts around here.

If you have any long positions, you might as well ride the rally and stay long. But if you want to get into the market, right now, you need to be very selective. Within every sector, you need to choose your stocks very selectively over the next few trading sessions.

Q: You are bullish on Tata Motors for the near-term, right?

A: Based on charts, it has already moved up substantially. I think the stock is up about close to 17% from the last settlement day. The open interest has come off by about 25%. So, this is short covering.

It has given a good pattern on charts. From here, if it breaks out, it can move close to 10% quite easily. What remains to be seen in whether this liquidity flow continues? Within the entire auto space, from a short-term trading perceptive, with a slightly stronger heart, Tata Motors looks well for the next move of about 10%.