Nifty bullish, series may expire at 5350-5400: MF Global

Vineet Bhatnagar of MF Global told CNBC-TV18 that the option data shows Nifty in the 5000-5500 range, with highest open interest build-up at 5000 levels. Bhatnagar advices trade on the long side and predicts Nifty expiry around 5350 or 5400 levels.

Below is a verbatim transcript of Vineet Bhatnagar's interview on CNBC-TV18. Also watch the accompanying video:

Q: How does Nifty Futures look to you? The spot market is indicating that an important technical resistance at 5370 has been broken. So would you play With caution or would you go long on futures?

A: Actually there is some level of underlying bullishness as we see in terms options built-up for the Nifty is appearing as of now. There is a build up at 5,500 and technically there is a resistance that comes at 5,450.

You must have noticed that the current few weeks have been characterized with very low volatility in the market and one of the contrarian indicators that we track is still not indicating that there could be a topping out of the Nifty as such. So the trade that we would actually quote will be on the long side of Nifty.

Q: Which way do you see this series shape up now? Where do you see expiry this time around?

A: It’s a bit too early to start looking at what could be the optimum expiration for Nifty, because there are still about 10 days to go. However, the way this particular month has panned out where Nifty has inched up from one resistance to another and there has been a cool off where sideways consolidation has happened and it has taken next step forward.

This all is indicative of the fact that the one way runaway move that people were expecting and which results in a sharp topping out or a sharp bottom to be formed is not what we will be witnessing this time around. Therefore, it is quite possible that Nifty moves to about 5450, hovers around that and as we have approached the expiration time it will be 5350 or 5400.

Q: What would be your conviction longs in the Nifty itself? There is no taking away from the fact while there is caution at higher levels the Nifty has broken the resistance level of 5,370. Would your conviction lie with the PSU banking stocks? Would it lie with Reliance? What could be relatively more convincing than the Nifty if at all?

A: We are seeing strength in both the sectors that you have indicated, banking sector overall. We are seeing some names in that space that would perhaps carry forward the strength that we have seen.