Nifty has been performing sluggishly in the last 10 days. VK Sharma, Head Private Broking & Wealth Management, HDFC Securities feel it will be very difficult for the Nifty to even cross the level of 5970. He prefers to continue selling on the rallies.
Below is the verbatim transcript of his interview to CNBC-TV18
Q: You have a trading strategy on Reliance Power this morning?
A: Reliance Power has been beaten down, but still people would feel reluctant to make a short call here. However, doing it through the options route is the best option. The options are pretty liquid here. I am suggesting buying the 80 put at Rs 2.50 with a stop loss of just Re 1. I also hope to sell this at around Rs 6 making Rs 3.50 in the process.
Q: How are you approaching the Nifty now after the sluggish performance of the last week-10 days?
A: We were very clear even before the series that it will be difficult for the Nifty to rise within next seven months in sequence. However, currently the Nifty has started breaking down. It is very difficult for the Nifty to even cross the level of 5970.
It will be a miracle if it crosses 6000. Our sense is that one should still continue to sell the rallies. In case one has one-two bouts of buying, those buying can happen in stocks which have been beaten down. Especially, stocks like State Bank of India, but just for a day or two, nothing beyond.
Q: Which one amongst the largecap’s like Tata Motors, L&T, SBI looks most vulnerable to you?
A: Lot of selling has already happened in SBI. So I don’t think SBI should be sold into now. However, the fact is that Larsen & Toubro which has seen some selling happening now is breaking key levels as well.
I suggest buying the 450 put in L&T at around Rs 32. Put a stop loss at Rs 20 and hope to sell this at around Rs 55 making around Rs 18-20 in the process. This is a sector which can still continue to be weak because Crompton also has weakened. There one can even consider buying the 100 put at Rs 3.90 with a stop loss of Rs 3.