Hemant Thukral, National Head-Derivative Desk of Aditya Birla Money told CNBC-TV18 that 5600-5610 may act as a strong support today and Nifty may close the week around 5630-5640.
According to him, the market is moving in more of a global mood and there are lots of short positions, which are open. He expects a bounce back in April series.
Below is the verbatim transcript of his interview to CNBC-TV18
Q: What is your approach on the Nifty this morning and where do you see this series close up?
A: The Nifty is only down 1 percent. From where we rebounded back in March series and where we are closing back, from high we have come down at least 5-7 percent already. So, we are moving today in more of a global mood. There are lots of short positions, which are open. One might find it taking support around 200 day moving average mark. So, 5600-5610 may act as a strong support today also and Nifty may close around 5630-5640 by the end of the day.
Going forward to April series is an interesting. Like we entered March, in April also people have already bought Puts. If one sees the data 5600 till 5300, everybody is a Put buyer currently and all are expecting Nifty to correct. As we have entered March and started, I am expecting a bounce back post we start with the April series.
A bounce back till at least 5740, so I would suggest selling 55 Put of April, which has gone very expensive now around Rs 45. It closed on Rs 35. So, I am expecting it to open Rs 10-12 higher around Rs 45-47 with a stop loss on Nifty of 5550. I have a feeling, we may not break 5550 on the downside and first see a surge in April series as we enter towards the 5750 mark just on basis of short covering. However, overall if one asks for today I still feel Nifty will hold 5600-5610 for even today’s session.
Q: Any specific heavyweights on which you are seeing a short rollover into the next series?
A: I would be watching banking very carefully because I feel the Bank Nifty, the roll cost is far lower than even Nifty going forward. Banking is still a sector where people have gone with short rollovers, especially stocks like Axis Bank where there is short being rolled.
If one sees rollovers in ICICI Bank are still towards the short side only. So, that is a slight worrisome signal that everybody in banking is still going with short rolls in such an oversold scenario. So, yes banking still looks slightly in mind of investments on the weaker side.
Q: The sector that has gotten hit the hardest in this series is real estate. What are you seeing in terms of trends as we enter into the April series and are there any strategies that you would want to advise there?
A: A majority of the rollovers are seen, though they are slightly on the weaker side. That is clearly because people have given lot of positions in leader stocks like DLF. The way this stock has performed in last 10 days, I see majority is on the short side.
Yes pullbacks will happen. I am even expecting a pullback in Nifty, but if DLF pulls back to Rs 245-247 that is a good zone to go short again. The way the shorts have been piled up in next series, I don't expect more than a pullback of 4-5 percent. Beyond 4-5 percent DLF will also struggle. So, I will be waiting to short DLF around Rs 245-247. However, I will not go short at Rs 228 because it is seriously oversold in these zones currently.
Q: You have a buy on Titan Industries for the morning?
A: Yes FMCG, midcaps are seeing long rollovers happening. So, stocks like Mcleod Russel (India), Titan, have seen long rollovers already. Titan technically also has formed a very strong base now around Rs 238-240 levels.
So, in immediate short-term that is the first one week of next series. I expect Titan to go and retest the next resistance zone of Rs 265-270. Traders going long should keep a stop loss around Rs 242-240 because that would be the support zone for Titan.