In an interview to CNBC-TV18 VK Sharma of HDFC Securities shared reading and outlook on the futures and options market. Stocks that do well on the Mahurat session day, are likely to fall on the next trading day, so one should opt for stocks that didn’t do well on that day, he suggested.
He is bullish on the private banking space and advices betting on Yes Bank and IndusInd Bank.
"If one has Yes Bank in his portfolio then it is time to look at IndusInd Bank. I would suggest traders to buy 380 call at around Rs 5. The call was somewhere around Rs 8 on the Muhurat trading session , so if this stock were to open lower then bid your time, buy it around Rs 5, keep a stop loss of Rs 3 and hope to make Rs 7 by selling it at Rs 12," he elaborated.
Below is the edited transcript of Sharma's interview with CNBC-TV18.
Q: What is the bias on the Nifty for you as a trader today?
A: One can definitely look at stocks, which did well on the Muhurat trading session. But it has been seen that the stocks which do well on that day shed some weight on the next day. So, it is better to pick stocks, which did not do that well.
From that perspective, if one was to just pick the Nifty, which didn’t do well yesterday and is likely to do worse today by falling 20 odd points in the opening trade – the 5,700 call which was quoting at around 49 on the Muhurat session was to come to a level of 38-39, then it will be a good trading bet not only for the intraday, but also for the rest of the settlement. This is pretty long settlement and ends on November 29.
Q: Is there anything that you would pick from banking stocks?
A: The private sector banks continue to look well. If one has Yes Bank in his portfolio then its time to look at IndusInd Bank. I would suggest traders to buy 380 call at around Rs 5. The call was somewhere around Rs 8 on the Muhurat trading session , so if this stock were to open lower then bid your time, buy it around Rs 5, keep a stop loss of Rs 3 and hope to make Rs 7 by selling it at Rs 12.
Q: What is the level on Bank Nifty that you are watching out for right now and any individual ideas that you have in the banking space for trade?
A: I did speak about IndusInd Bank. If one were to look at other banks then one will continue to look at the private sector banks alone. Yes Bank can be bought 1 or 1.5 percent lower than this and keep a stop loss of 1 percent there.
To be precise on the Nifty, the Bank Nifty closed at around 11,534, so just for today if one wants to have a trade then one can buy around 11,500 and keep a stop loss of 20 points for a possible upside of 40 points from those levels. That could be an intraday trade.