Bank Nifty may pick up by expiry day: Angel Broking

In an interview to CNBC-TV18, Siddharth Bhamre of Angel Broking says that he is neither negative nor positive on the market. He says, "Not many people have written options, so it would be difficult to say where the expiry would be heading."

He adds saying, "The 19 percent rollover in Bank Nifty is something which is not easy to digest. So, you might see activity picking up there as well." Also read: Positive on aviation, telecom: BNP Paribas

Below is the edited transcript of Bhamre's interview.

Q: How is the Nifty  looking going into the next series? Rollovers have been very slow. Atleast movement on the index has been extremely sluggish. A: One could say Nifty’s 33 percent rollover is not bad. You may see rollover activity picking up today; tomorrow being a holiday and then on Thursday- the expiry day. However, the 19 percent rollover in Bank Nifty is something which is not easy to digest. So, you might see activity picking up there as well. The disappointing thing is that Mini Nifty, which has been a very good indicator of what retail participants are doing, would no longer be an indicator after a couple of months, as it is moving out of F&O. We think that this market is heading down. We are still skeptical on the market and the premises on which we had this view was that the rupee would be depreciating and you might see liquidity drying up or probably moving out of the system also. Not moving out in a very big way but some bit of it. Strangely, the rupee did depreciate but we have seen markets stable at lower levels. It did breach the support of 5630 and did go below those levels but thanks to positive global cues, we have not fallen significantly. The FIIs in the same period have not pumped in huge money. The money is trickling like Rs 100 crore, Rs 200 crore, 300 crore of buying. It is not very big. Now the market is stablising and the rupee has further depreciated. This would result in a favourable scenario for FIIs to put in money. The very negative stance of the rupee stabilising, think we need to change that because the way market has stabilised. So, at this point of time, neither are we very negative on the market nor are we very positive. We are adopting stock specific approach. Not many people have written options, so it would be difficult to say where the expiry would be heading. However, this narrow range of 100 points which we have seen for such a long expiry has been a very long expiry, time wise. I don’t think there should be any breach of this range in next two trading sessions that is including today.

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Q: The metals came back yesterday and you are playing a long on Tata Steel today? A: If you look at the charts of the stock, around Rs 360-365 it is a very good support, it is a strong support level. Many times the stock has bounced from these levels. That is not the only reason why we are optimistic. There are too many short positions that have accumulated ever since it breached that Rs 405- Rs 400-395 zone where it had strong support. We have seen huge addition of short positions. Yesterday, the stock did go up and there was an addition of 8 percent in open interest, which was more or less long. So now, if you see any further tick from here, about Rs 372-374, you would see shorts running to cover their positions. Hence we are bullish on the stock. We are expecting the stock to probably head towards Rs 395-398 levels. Go long with a stop-loss of Rs 361. Q: You are bullish on Chambal Fertiliser? A: Yes. It is quite a conservative stock and we have seen that in the last fortnight or so, the stock is consolidating with a slight negative bias. It has a lot of short positions. Around Rs 63-65, the stock has a very strong support. We are not expecting a breach of this support anytime soon and expect a short covering over here The reason for this is that around 2000 contracts were traded yesterday. Usually, the contracts which get traded around are 600-700 contracts, so the volumes shot up in futures segment significantly. Even in cash market segment, the volumes were decent. So, we are preempting a good upside move from current levels after consolidation and I am suggesting buying the stock for a target of Rs 74 and stop loss of Rs 62.

Q: What was happening with Mahindra & Mahindra in your market yesterday? A: After the news of them bidding high for Aston Martin, a good amount of short positions were created. At the same time M&M is one stock which has been outperforming, so there might be a long unwinding pressure also. So, I don’t see any respite as such. I don’t expect the stock to continue to fall, but whatever it has lost, it would take some time to regain. As such there is no structural change in statistics or charts of M&M which would suggest that now it is heading significantly down.