Nifty won't slip below 5,450 in Sept series: Hemant Thukral

"I would be watching 10,700 on the Bank Nifty 10,700 more crucially than Nifty hitting 5,630," he added. 

The central bank’s positive move with push the Nifty up by 1-1.5% from current levels. Meanwhile, he doesn't except Nifty to slide below 5,450 in the September series.

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

Q: In the near-term where would you set your sites on the Nifty as a termination point and extension of this rally?

A: There are two things very crucial for me today. The rally seen on Friday was majorly led by overbeaten stocks which were on the short side, so the shorts have been caught up, but there are still shorts in the system.

With another surprise from RBI, banking can get a very good boost for this rally to move further up. If this rally has to be taken over, it has to be taken over by the banking stocks.

I would be watching for 10,700 on the bank Nifty more crucially than Nifty hitting 5,630. I am looking for another stretch of 70 points from there. We can see Nifty going up if RBI also surprises with a positive. Beyond 5,700 it will be stretched.

Should we go ahead and long today even if the market opens up? Yes, but take a stop loss of 5,590 and go long because if RBI surprises, we would have another 1-1.5% further up move on the Nifty. So 5,590 should be kept as the stop loss level.

If we move below that then this rally would go further down. The base has been shifted upside. The call writers have to cover up positions, so the base is 5,450. It will be a real surprise for me if Nifty goes below 5,450 in this series.

Q: How would you approach some of these beaten down infrastructure names for e.g. IVRCL?

A: I was trying to factor in stocks which have not seen that much short covering and infrastructure falls into that category especially stocks like GMR and Lanco. In IVRCL, we have seen that there are lots of shorts still open in it and now it has closed above Rs 40-41 level. If this rally moves up further then further short covering can be expected.

I expect IVRCL to retest Rs 44-44.50, that’s the higher side of the bracket. Keep a stop loss of Rs 40-40.50 because if it moves back below Rs 40 then one should give up any long positions formed. In the immediate short-term, I am seeing another spike of 8-10% in IVRCL and other infrastructure stocks.