Nifty to consolidate in 5050- 5350 range: Hemant Thukral

"The 5,400 call writer is getting very aggressive on daily basis.  An open interest of 65 lakh shares is added up on that strike price, so that will be quite difficult" he elaborated.

Aggressive traders should buy Nifty future since another 70-80 points rise is expected. The stop loss should be kept at 5,150, he suggested.

He sees 5,350 as key resistance level for the Nifty.

Below is the edited transcript of Thukral’s interview with CNBC-TV18.

Q: How you would approach the Nifty for the day?

A: For me Nifty continues to hold the broad range we saw in July also. As we had expected 5,050 did not break on the downside. The market is now moving ahead and it has to retest highs of 5,300 and 5,350, which will be slightly tough because of the way the call and put writers are getting placed. 5,400 call writer is getting very aggressive on daily basis.

An open interest of 65 lakh shares is added up on that strike price, so that will be quite difficult. The broader range will remain the same i.e. 5,050 and 5,350. So, we are recommending two strategies. If you are a very aggressive trader, buy a Nifty future because still we feel another 70-80 points rise can be expected but keep a tight stop loss of 5,150.

If you have a slightly positional call and if you are looking for or hedging yourself to sell 5,400 call around that 33-35 mark and keep a stop loss of 5,350 because we do not expect the Nifty to just cross 5,350 in a hurry. We feel that level will be a crucial resistance point and Nifty may continue to consolidate in this range.

Q: Between four of these stocks that have had the best performance year-to-date (YTD) Larsen & Toubro (L&T), ITC, ICICI Bank and HCL Technologies that are all up about more than 30% which one would you bet on from here?

A: From the first day of this contract, we have been recommending the private banks on the basis of rollovers. I continue to feel that private banks have an edge in this market; they will be the one if Nifty has to surprise even above 5,350. I will bet for ICICI Bank to move forward. Kotak Bank should also catch up in this rally going forward because yesterday was the first day after seven days that the cost of Kotak Bank change to positive.

A lot of short covering has happened, delivery based buying has taken place. So, Kotak Bank can move further to Rs 568-570 levels. Among the four that you mentioned, I will continue to bet on ICICI Bank.

One should buy every dip with the target of Rs 985 to Rs 1,000 on the higher side. If somebody wants to play for a one private bank, Kotak Bank is the right choice now because there is a lot of gap in between the performance of Kotak, ICICI, Axis and HDFC. So, some catch up rally can be seen there.

Q: You have a call on Dish TV for the day, can you tell us about that?

A: Because Nifty is getting consolidated a lot of midcaps have come in action, especially the media counters, Zee and Sun TV saw a very good rally just two days back. We saw Dish TV playing a catch up with it yesterday and it also saw a huge addition of open interest with rising cost.

So, the stock has seen some buying interest coming back. Importantly, the stock has closed above Rs 70-71 mark, which was proving to be a resistance. In the immediate short-term, we see a target of Rs 74 or net, but all traders should keep a stop loss of that Rs 68 level because if it moves below that, it would signal that this breakout was false.

Q: Do you have any call on any sugar names Balrampur Chini or Bajaj Hindusthan?

A: What was seen yesterday was more of a short covering coming in again. The moment stocks see some price rise in the bottomline commodity, there is some buying coming in, but it is in form of short covering rather than aggressive long positions.

But still I feel that Renuka around that Rs 30 mark is finding a lot of support, Rs 29.50-30. If somebody manages to get hold of Renuka around Rs 30.50-31, it is a good bet for a target back to upto Rs 33-33.50. I would just like to emphasize that I would love to see some long positions being added up rather than just short covering. They are still moving up more on the short covering side.

Q: Give us a quick word on how you would approach trade, would you buy any early morning weakness or even if it starts 10-12 points higher can you initiate a long here to play for another 100 odd points?

A: For aggressive traders, I don’t think there is a problem because Nifty still will move towards that 5,300 mark. If you get a good 10 points downside, it is good for us. But one has to keep a stop loss of 5,150 because that is the crucial level, which Nifty has managed to cross and now it is sustaining above it. You keep it as a sell and keep a target in your mind of 5,300-5,320 so any dip of 10-15 points, I will buy into it.