Canara Bank may slip to Rs 458, says Amit Gupta, ICICI Direct.
Gupta told CNBC-TV18, “Especially if you look at this particular series, we have started at a very low open interest base but since we were holding 5,200, everyone was looking at the options build up, 5,200-5,100 put options, they had a very good base. So we saw that the midcap space, particularly the banking also they started seeing good additions and now if you look at what is happening, there is a general view in the market that the May series is going to be highly volatile. Now this is the last decade, we have seen that continuously in the month of May very large moves are likely to be seen. So people are very skeptical, whatever build up was seen in this month, they are not rolling the position to the next month."
He further added, "This is where I think the long liquidation is happening even if you look at the heavyweights in the banking space State Bank of India (SBI) or so, they were not able to hold Rs 2,300 and now they are close to Rs 2,100 or Rs 2,150 very strong support areas. So I think the heavyweights were not performing, so the midcaps are giving up."
"Canara Bank is one of those stocks which I think is looking vulnerable because February 27 particularly if you look at when the market started giving up from 5,630 to 5,268 levels, we saw that below that level, Canara Bank is continuously trading. So this is one of the stocks, which is weak and I think Rs 473-475 area we are seeing there some shorts have come up in the stock. So it is possible it may be direct towards Rs 458 in the coming sessions."
"Another thing I think whatever build up came during the month in anticipation of a breakout in this stock and I think they are slowly giving up so that may also lead to the decline. I am able to find out this stock in the short side, if banking stocks, heavyweights are not able to perform, I think this may give up."