In an interview to CNBC-TV18, Hemant Thukral of Aditya Birla Money shared his views on the market and recommended strategies for various stocks.
Below is a verbatim transcript of the interview:
Q: It was a stellar week that we had, the week gone by, how would you approach it today?
A: I would like to discuss few crucial data points. This is a truncated week. We have only three days left for expiry. The way the rollovers are happening till now, T-3 if I take an average, we are way below the average rollovers.
In fact, stock futures have rollovers just of 19 percent against the last three months average of 32 percent clearly telling that it was a rally, which was carried out by short positions getting clearly squeezed out of the system.
Now, you do not have that short covering. I would put it as a shoulder to carry on this rally. So, now it is a serious test with expiry approaching. I would be of the camp that around 5,850, which is also technically an important resistance level, one should book out long positions and wait. I am expecting a bit of a correction before the expiry eventually happens. I am looking at a target of around 5,760 to 5,750 towards the expiry sessions.
Main problem will come in banks because the rollover of ICICI Bank and HDFC Bank is 5-6 percent. This is not a rollover, which we can carry forward. I am expecting some profit booking. Around 5,850, one should book long positions and check out for a target of 5,770-5,750 on Nifty by this expiry.
Q: If your call is that most of the shorts are in the system right now, at what point would you consider opening up some kind of short position in the market or conversely do you think momentum is probably moving it higher and that is not a wise trading strategy to employ right now?
A: At first, I would be looking out for 5,850. If Nifty is not able to sustain above those levels, for traders, I do not mind doing a short positions here and keeping a stop loss of 5,870 just 20 points because Nifty has a very positive momentum currently.
Around 5,850, we will ultimately see the breather and the expiry catching up and you will see it revising 5,750-5,770. So the benchmark level would be 5,850 and then 5,870. So these 20 points will be very crucial to see how Nifty will behave from hereon.
Q: You have a strategy on Zee Entertainment this morning?
A: Yes. Zee Entertainment is one individual midcap, which I have started seeing short covering on Friday itself. Also, the way the rollovers have started taking place in this stock among all the media stocks, it can be an outperformer.
Technically, it has managed to cross above that Rs 210 mark, which I was looking at as a stiff resistance zone. So, now it can move up to the next level of Rs 219-221.
Yes, traders have to keep a stop loss, which I will maintain at around Rs 202 but Zee Entertainment as a midcap should be kept on the long side today.
Q: You were talking about the Bank Nifty, aside from that any specific heavyweights that stand out either in terms of the ones that are seeing a huge long addition or short covering or conversely where you are seeing shorts opening up?
A: I think IT will continue to remain weak going forward in May series. This is after a long time that I am seeing shorts being rolled even in a stock like HCL Technologies. So, the pressure will continue. I do not see Infosys crossing Rs 2,400 going forward also. Yes, small bounce backs can come because there are some shorts still open in the system but that should be utilized to exit.
Similarly, I will not be a buyer in public sector undertakings (PSUs) like a Bharat Heavy Electricals Ltd (BHEL) or a Coal India. Again, the rollovers have been on the short side. I do not want to touch these counters.
PSUs and IT majors will continue to exhibit shorts even going forward in May series.