Nifty may see 6150-6200 in Sept series: Angel Broking

Siddharth Bhamre, Angel Broking in an interview to CNBC-TV18 shared strategies on how one should play the Futures and Options market.

Also read: India's business confidence at four-year low: Survey Below is the verbatim transcript of his interview Q: What is your sense in terms of the Nifty positions that will be defended or broken today? A: The view is same to the one it was on last Tuesday - this market is still not an overbought market. People have seen this bounce back from 5,200 to 5,900. The implied volatility is still around 31-32 percent. If you look at the yesterday’s correction – from my interaction with fundamental guys and people in the market, they said there was a lot of expectation in the market because there will be a rate cut. And also because inflation number instead of 5.7 percent came to 6.1 percent, was the reason market has corrected. Although, I do not find much of logic into it because I don’t think strong hands in the markets were expecting any rate cut even if one keeps inflation figures aside. The other thing that I heard is that the measures taken by Reserve Bank of India(RBI) to control rupee would be probably rolled back. Since there was volatility for two-three months and things that were announced two-three weeks back which made rupee stabilises from 68-69/USD to 62-63/USD, I don’t expect RBI to rollback those measures anytime soon. I believe that market overreacted yesterday on inflation numbers because anyways rate cut and the rollback was not expected. At the same time, I heard a lot of talk about the kind of money is coming into this market and question on how long this money can stay and that it is more of hot money, ETF money etc. However, I believe that even if it is hot money, ETF money or long only, nobody comes in this market for only 3-4 percent returns or 5 percent returns - the way FIIs have pumped in money in this market from 5,500-5,600 levels, you cannot expect them to book profit at 5,800-5,900. They are not positional traders. Even if they are investing, even if it is ETF, they will wait for 8-9-10 percent returns. I believe this market is in stronger hands, FIIs are putting money into this market. We are heading towards 6,150-6,200 levels probably in this expiry. Q: Since you do have a bullish bias on the index - in terms of individual stocks, are there any long positions that you would want to advice to take in trade today?
A: There is one more reason to support my argument on why yesterday’s reaction was too much - if interest rates are not going to get reduced as market anticipated, it would have most negative impact on rate sensitive sectors. So, then why banking sector was up yesterday?
 I believe there is a lot of strength in the banking sector. We are seeing formation of long positions so we would be long on Bank Nifty. We would be long in public sector undertaking (PSU) names like Punjab National Bank (PNB), State Bank of India (SBI), in private sector ICICI Bank. That is banking sector.
If you look at most of the other heavyweights they are showing interesting built up. I would like to be long, or buying on dips. Though a lot of people have been saying buying on dips but those dips are not coming into the market. Even yesterday it was an intraday fall and not a positional fall. So there is no dip.
Therefore, Reliance Industries Ltd (RIL), Larsen and Toubro (L&T) except IT, these sectors or these heavyweights, I would be long on and trade with positive bias. However, the clear trade right now is long Nifty. Q: If it is long Nifty then could you give specific trading calls for the day in terms of long positions which else would you trade other than those that you mentioned?
A: What I would do in Nifty at this point of time is that at 5,850 go long. In fact yesterday, we initiated long positions around 5,800-5,820 and for some of the traders who were looking for a day or two, we told them to sell 5,900 Call Option because IVs are quite high.
However, for a trader who is looking from an expiry view or probably from a big positional view then rather than selling Call Option, we would suggest going aggressively long, buy going long at 5,850 and probably you can sell 5,700 Puts also because IVs of Puts is around 34-35.
At the same time, the stocks which we mentioned – you can do a covered Call writing in ICICI Bank, you can do covered Call writing in SBI. We also like L&T, Reliance Industries Ltd (RIL). I am slightly more optimistic on oil marketing companies (OMCs) also, so watch out for Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation Ltd (HPCL) as well.
_PAGEBREAK_ Q: What about Bank Nifty, you mentioned 6,150 as your target on the Nifty but on the Bank Nifty beyond this 10,400 level how much do you see?
A: We are heading towards 11,000 and we would see some kind of resistance coming over there. Again a lot of talks and things would be happening in next three trading sessions   because tomorrow you have FOMC, September 20 you have RBI policy, so Fed is going to do tapering by USD 5-10 billion is discounted by market. So you would see high volatility in these next two-three trading sessions but in this market you should stay long.
I believe upside there is upside in banking. A couple of months back, we had seen Bank Nifty taking support around 11,200-11,400 levels. I think it would touch levels and take resistance there. So, even Bank Nifty I will be long but Bank Nifty has not shown intraday dips which the Nifty has shown.
So, my conviction on going long is higher in Nifty rather than Bank Nifty. But less conviction in Bank Nifty doesn’t mean that I am saying book profit and move out. Q: Any short trade at all?
A:  In Information technology sector, you could see some correction but rather than finding shorting strategies right now, we would be more concentrating on where to buy. Q: Opening is a little downbeat; you would still keep with your long strategy?
A: This 20-30 points here and there shouldn’t bother us much, and more than levels or daily moving averages (DMAs) what FIIs are doing that would bother us. Stocks which we mentioned are not very significantly down in fact some of the stocks like SBI is in positive terrain. So opening has not jittered us from changing our view and even if there is 30-40 points downfall from here, we will not change our view unless until we see huge change in data.
So, one continue to hold on to your long positions intraday wise probably if you see level of 5,800 or 5,790 that would be a good level to go long in this market.