Nifty July series, which has been on a rollercoaster ride since the beginning is mostly likely to end at 6100, experts said.
SP Tulsian of sptulsian.com stressed that Bank Nifty would pull up the Nifty to 6100 level as short covering is seen in bank stocks after being hammered in last week. "I expect that Bank Nifty can get pulled to the level of 11450-11500. I don’t think that tomorrow and day after tomorrow we are going to see a big upside but you cannot rule out the possibility of even going to the 6200 also by expiry which has a very low probability of maybe 20-25 percent. So, as of now 6100 seems to be the level at which the expiry is expected," Tulsian added.
Sudarshan Sukhani of s2analytics.com also agreed that 6100 level was a magnet now and the future and options could have an expiry around this level.
Today, Nifty gained 46 points to finish at 6077.80 after witnessing volatility ahead of July expiry on Thursday.
Tulsian believes that information technology stocks and Hindustan Unilever are likely to contribute to a positive close for July series.
Gopi Suvanam, Founder, InvestWorks advises investors to keep a balanced view over a short term. “I wouldn’t go outright short the market. But I would be slightly wary of the risk. At the same time maybe trade in opportunities of downfalls to build in some investments.”
Although Suvanam advises investors to build positions in defensive sectors like information technology and pharmaceutical, he also agreed that these defensive sectors were overbought. There can be some more momentum in these stocks given the strong fundamentals, but the market may not keep buying the same set of stocks.
"The only way Nifty could go up is some amount of recirculation of the money, maybe some money would move out of some of these sectors and maybe go eventually into banking or heavy industry," Suvanam added.
He feels that if stocks like Bharat Heavy Electricals (BHEL) and stocks from infrastructure and non banking financial companies (NBFC), which are in oversold territory sees some pickup, then Nifty may push up; otherwise, the upside on Nifty is capped.
Watch out for these stocks tomorrow
Tulsian is not too negative on the first quarter result of the cement companies but expects more pain for these companies following slowdown in construction activity.
“We have been seeing heavy monsoon across the country and that is the fear that probably the construction activity has taken a halt and the off take in the month of July is quite poor or quite low,” Tulsian said. Cement stocks may take a hit following apprehensions about September quarter earnings.
He noted expectations of better earnings could have resulted in 11-12 percent upside in Dabur seen recently.
Go short on these stocks
Experts advised investors to stay away from realty and telecom sectors. Tulsian stressed that it was not a right time to look for telecom stocks as the companies are still awaiting decision on 2G case. He advises to undertake profit booking in Bharti Airtel and to buy back again at sub-Rs 320 levels.
Suvanam advises to stay away from sectors where there is a liquidity pressure and valuations are not attractive. “I am looking to short DLF at the current levels and maybe put a target of around Rs 150 and stop loss of around Rs 185,” he added. Unitech, another stock from realty can also be sold at current level, Suvanam said.
He also advised investor to stick to bluechip and largecaps companies and avoid midcaps and smaller companies at this moment.