Hemant Thukral, National head- Derivative Desk, Aditya Birla Money shares his view on the futures and options market and his strategy for the coming week. In an interview to CNBC-TV18, Thukral said he is bullish on Bajaj Auto as interest in the two-wheeler space has re-emerged. He recommends buying the stock keeping a stop loss of Rs 1920 and a target of Rs 2070.
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However, he is bearish on Bharat Heavy Electricals (BHEL) and suggests selling the stock keeping a stop loss of Rs 190 and a target of Rs 163.
Below is his F&O strategy for Bajaj Auto and BHEL.
On Bajaj Auto
The first of the weekly strategies is Bajaj Auto. In two wheeler stocks on Friday, a lot of buying interest has re-emerged. Both Hero Motors and Bajaj Auto have added huge open interest on the long side, especially Bajaj Auto where 16 percent open interest has been added up.
Technically, the stock has managed to cross 200 DMA convincingly which is in the range of Rs 1885-1889. Also the stock has managed to close above the recent highs of Rs 1920-1925 which was acting as a resistance for this stock. In the immediate short term that stock should go ahead and retest the next resistance zone which is around Rs 2050-2070. So, we recommend going long on Bajaj Auto keeping a stop loss of Rs 1920 and a target of Rs 2070 on the same.
Second weekly stock strategy is a sell call on large cap capital goods Bharat Heavy Electricals (BHEL). It has been a complete disappointment. The stock has managed to cross 200 daily moving average (DMA) and was touching a resistance zone of Rs 190. However, on Friday we have seen a complete U-turn in sentiment.
Around 20 percent positions have been added up on the short side. Not only has the stock not been able to manage to cross Rs 190, on the downside it has given away the strong support of 200 DMA which is around Rs 183-182. So, in the immediate short term we expect BHEL to retest the recent lows formed around Rs 163-165.
So, we recommend going short on BHEL keeping a stop loss of Rs 190 and a target of Rs 163.