Maintain positive bias despite sluggish mkt: Hemant Thukral

In an interview to CNBC-TV18, Thukral says that the market is slightly overbought in the short-term, but that traders should look to buy at lower levels because the Nifty is headed to 5,380-5,400 in the next few sessions.

“During this consolidation, you will see some of the stocks cooling off, taking a break and then start moving up again. So the stop loss for all long positions is 5.230,” he said.

The view on the street is that this week is crucial in determining if the Nifty will continue its uptrend

Below is an edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.

Q: How is it looking in your part of the market and with what kind of bias would you trade the Nifty now?

A: I think more or less the range which we had kept in mind last week remains same because put writers are still very active at 5,200 and similarly the call writers are not giving away 5,400. So what I feel is that market has gone slightly overbought in the immediate short-term and that is why you are seeing a sideways consolidation.

During this consolidation, you will see some of the stocks cooling off, taking a break and then start moving up again. So bias remains positive, but the sideways consolidation may continue for another two-three trading sessions.

So till we hold above 5,230, that’s the stop loss that we have kept for all long positions, I think one should continue to add at lower levels. We still have a target intact of 5,380 or 5,400 in next three-four trading sessions. But I am looking at a slightly longer period of sideways consolidation for next three-four trading sessions.

Q: What is the trade on the Bank Nifty for this series?

A: For me banks hold the key, right from the rollover day till today. Even if you see the first week of this current expiry, banks have accumulated the highest long positions whether it’s HDFC Bank , ICICI Bank , SBI  or whether it’s a midcap or a largecap bank, it’s a huge accumulation of long positions. So banks hold the key.

As Bank Nifty goes, 10,450 is the key level for me. Till it holds above that you can see it moving towards 11,000. So the immediate support that I can see is 10,450 for which it should hold.

On Friday Yes Bank started seeing some buying coming in. It’s been more of a catch-up rally which can continue for next one-two trading sessions from here on. So Yes Bank can be an immediate buy with a target of Rs 370 to Rs 375. But do keep a stop loss of Rs 345-350 because that has been the zone where lot of strong support has been for Yes Bank.

Q: You have a strategy on JSPL today?

A: Yes. Among all the metal counters Jindal Steel and Power looks the weakest. On Friday, JSPL added a lot of aggressive short positions so the open interest total has gone up by 10% and the cost has come down. So pressure can be felt.

We are recommending a sell around Rs 455-456 levels. Do keep a stop loss of Rs 460-465 on it because the three days high is Rs 465. So if it manages to cross Rs 465, traders should come out of this position. In immediate short-term we are looking at a target of around Rs 439-440 levels.