The Indian market on Thursday soared after investors started buying banking stocks due to expectation from the Reserve Bank (RBI) to cut rate on its March 19 monetary policy. The Sensex gained 208 points at 19571 while the Nifty was at 5908, up 58 points, led by strength in banks.
Shardul Kulkarni of Angel Broking recommends buying the Nifty future with a stop loss at around 5860. When talking about long positions, Kulkarni says, "Going forward, any long positions from a positional perspective should be build beyond the levels of 5970 on the upside."
Among stocks, Kulkarni is bullish on largecaps like Hindustan Unilever (HUL). "The stock is a defensive and if the market is going to move up, HUL will contribute significantly. If the market moves down, you will get good outperformance in comparison to the benchmark indices," he says in an interview to CNBC-TV18.
Below is the verbatim transcript of Shardul Kulkarni's interview on CNBC-TV18
Q: It is a bit of a rebound particularly from the lows. Do you think we have found strong support at the intraday lows today and what are the next levels you are watching out for?
A: Today has been an eventful day. Initially there was some news pertaining to the banks, then we saw a good move on the downside and then a phenomenal recovery from the lows. I don't know whether any trader got a chance to initiate long positions at the lower side but don’t make too much of haste to initiate long positions immediately at this point of time. Let the market cross 5970, you will get an inverted head and shoulder pattern breakout on the upside.
If there is some positive news on Tuesday, then 5970 will be taken out before Tuesday. Going forward, any long positions from a positional perspective should be build beyond the levels of 5970 on the upside. For all those who have got into the market at this point of time, place a stop loss on the lower side at 5860 on the Nifty spot. If the market were to break 5860, the current momentum will be lost and you will see the lower side rates quite fast because we have seen the market move lower quite fast and give a very strong recovery. The following move can also be equally stronger so 5860 on the lower side should be the stop loss.
Q: Would you play any of the midcap stocks for a small bounce?
A: The volatility in midcaps over the last few sessions has made it very difficult to trade. I would prefer largecap stocks to trade and in them HUL is a good bet. The stock is a defensive and if the market is going to move up, HUL will contribute significantly. If the market moves down, you will get good outperformance in comparison to the benchmark indices. So, HUL would be a buy for me. In case of the prices, on the upside Rs 480-485 is what I am looking at. Buy with a stop loss on the lower side of around Rs 442-443.
Q: What about State Bank of India (SBI) and Unitech?
A: In case of SBI, today's move is very strong but I would rate this as a bounce because overall the chart structure on the weekly is quite bearish. You are still seeing that it has just given a bounce on the upside because the fall from Rs 2500 right up to Rs 2050 that move is being retraced. You are already seeing a 200 point move from the lows. So, I would not want to venture in and buy SBI at this price.