See resistance at 6200; bullish on pharma, ICICI: HDFC Sec

In an interview to CNBC-TV18, VK Sharma of HDFC Securities spoke about current market trend and his views on various stocks.

He says, "Puts are being written at 6200 although the calls which were being written at 5900 have now moved up to 6000 levels. So, 6200 continues to be a good amount of resistance. Unless this is crossed, I think one need not build any kind of positions beyond this level." Also read: Mkt trend may reverse anytime; bet on oil stocks: HDFC Sec Below is the edited transcript of Sharma’s interview to CNBC-TV18. Q: What are your recommending for people to do on the index now? What looks like a reasonable target for the Nifty and if someone is trading it long?
A: The reasonable target continues to be the level at which the Puts are being written. Puts are being written at 6200 although the calls which were being written at 5900 have now moved up to 6000 levels. So, 6200 continues to be a good amount of resistance. Unless this is crossed, I think one need not build any kind of positions beyond this level. So, I think call writing can continue to be done at this point of time. However, if one were to look at a sector then pharma is a sector that looks pretty good. If you were to choose between pharma and IT then pharma is any day a better sector than IT. Q: How are you approaching bank stocks now for the second half of the May series?
A: If one just looks at the Bank Nifty, it has seen a lot of put writing in the region of 12,750 levels. On Saturday, it closed at 12,780. So, my sense is that if it runs up in the morning, I would not participate. If it were to consolidate and then move beyond a level of 12,800, then I think further 200-300 points rise in the Bank Nifty, one can really participate.
One of the banks that has not participated so much in the past few days but which could participate now is ICICI Bank. We did see marginal positions being built. The stock went up one percent. So, I am suggesting buying 1180 call which closed at around Rs 20 because of Saturday. So, my sense is, if this were to fall to around Rs 15, one can easily buy this call. Put a stop loss of Rs 10 and hope to sell this at Rs 30 almost doubling the profits. Q: You have a trading strategy on BPCL today?
A: There are two reasons for the hike in diesel price on Friday. The markets had noted that one month was missed and I think that was because elections. So, the government has made its mind very clear that it has made up for whatever loss that these companies had incurred. One can look at the Rs 420 call which was available at around Rs 11. Keep a stop loss of Rs 8 and hope to sell this at profit of around Rs 17-18 at around Rs 28-30 levels. This will definitely participate atleast for the next two sessions.