In an interview with CNBC-TV18, Hemant Thukral of Aditya Birla Money, spoke about his reading of the market and his outlook.
Below is a verbatim transcript:
Q: How are you mapping the last few days and what kind of an expiry do you see for the January series?
A: Expiry will be slightly with a positive bias. Becuase of the way the Put writers have accumulated themselves now on 6,000 and on Friday, there was some built up on 6,100, I am expecting the expiry to be on a higher side i.e. towards higher side of the band 6,130. So, I still maintain a positive bias on Nifty.
However, we have got a very big event on hands tomorrow that can decide the fate. But till now the data points are reflecting that the bias is completely positive.
Having said that, I am slightly worried about the mid-cap stocks. From last three-four days, we did see some short covering coming in, but the confidence of mid-caps seems to be going down. Clearly, tomorrow's event is very important because the large-caps cannot continue to move up unless and until mid-caps also catch up. However, the bias is positive because the large-caps are still holding very strong.
Q: Any big position build up you saw on the Bank Nifty ahead of tomorrow's policy and how are you trading that?
A: In the public sector undertakings (PSU) banks, on every fall of 5-10 percent we are seeing the buying coming back.
Stocks like Bank of Baroda (BoB) and Bank of India (BoI) both saw fresh longs on Friday from lower levels coming back in and the leader itself is leading the rally. So, I am still positive specifically on State Bank of India (SBI) and BoB.
Q: Getting to some of your strategies today, Maruti Suzuki is a long call?
A: Yes, in fact Maruti Suzuki is one of the few counters that has already shown lot of strength going forward in February series. The way the rollovers have pegged up with the rollover cost already moving up, it seems that it can be one of the main outperformers in Nifty50. So, we are suggesting to go long on Maruti Suzuki. Traders have to keep a stop loss of Rs 1,570. However, we see a target of around Rs 1,660-1,675 on it. So Maruti among the auto pack for me can be an outperformer going forward from hereon.
Q: Any trading calls on some of the infrastructure names like JP Associates or any of the others?
A: The CNX-midcap is slightly showing signals of traders giving away their positions. Friday, what we saw, was just a first round of short covering. So for me to continue or to even go long on infrastructure stocks, I will be waiting for some fresh long positions being built up.
If there is no built up on these stocks and a resumption of shorts takes place then obviously they are heading more towards the downside.
Specifically, to talk about JP Associates, I think JP will face a huge resistance around Rs 89-90 levels. Only if it crosses Rs 90, I will be interested in that otherwise it can retrace back to Rs 80. So, around Rs 89-90 I will take a fresh call on the stock.
Q: Any trades from the auto pack, names like Tata Motors and Maruti Suzuki, which have been quite active last few days?
A: Among the auto pack, Maruti Suzuki is showing the best strength and I would continue to go long on it with a price target of Rs 1,670. What we saw on Tata Motors on Friday was a short covering of the previous day. Yes, if Tata Motors consolidates above Rs 310 then I think it becomes a good buy but still I think one should favour Maruti Suzuki in the auto pack.