See more 100pts upside for Nifty; hold longs: Thukral

In an interview to CNBC-TV18 Hemant Thukral, national head-derivative desk, Aditya Birla Money shared his views on the Futures and Options (F&O) market. He sees more upside for the Nifty from the current levels.

Market participants who already hold long positions can continue to do so because the Nifty can move up another 100 points, he suggested. He further added that the real test for the bulls will be around 6,000-6,050 levels because it would require big positive newsflow to surpass those levels. "Even if FDI is cleared in Rajya Sabha (RS),  a lot of other things have already been factored in," he said. Also read: Mkt trend upwards; go long using Nifty Options says, Sukhani Below is the edited script of his interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee Q: We have reached 5,900 now, how much more in this series you reckon? A: I feel there is still some more room on the upside. Basically, the real test for bulls will start from 6,000 to 6,050. Right from the start of this series, we have seen that Call writers have accumulated on 6,000 and there is already an open interest of more than 80 lakh shares, so that will be a real test. We should not forget that because of this event, India volatility index (VIX) has moved up back to around 17 levels, which has been this year's high i.e. around 17.5. Around 6,000-6,050 levels, will be the test for the bull's and it will need good news to pass that level because even if FDI is cleared in Rajya Sabha (RS),  a lot of other things have already been factored in. So, one can exit if they are holding longs around 6,030-6,050 and for all long positions, we are keeping a stop loss of 5,780.  One can continue to hold long because I feel there is another 100 points room on Nifty, even after today's small gap up opening. So around 6,030 one should start looking to book profits. Q: Real Estate was the big star yesterday, what would you back in that space? A: Right from last contract, real estate has been bullish. The way the rollovers happened, they clearly signalled that the sentiment continues to be bullish. Yesterday, we saw DLF as well as HDIL and Indiabulls Real Estate, add open interest. Our preference is to Indiabulls Real Estate because that has seen the maximum addition on the open interest side and with the rising cost, which clearly tells that lot of long open interest has been build up. Technically, as well Indiabulls has managed to close above Rs 70-72 barrier and made a new six months high, so it has crossed resistances now. If the traders go long, we are expecting a target of at least Rs 84-86 levels but traders have to maintain a stop loss because it is a high beta counter. We would be looking at a stop loss around Rs 68-69, which will act as a very strong support for it. Q: You are trading Infosys from the IT space? A: Yesterday, we have seen first signals coming in that shorts have started to build up in IT stocks; both Wipro and Infosys have seen shorts. Infosys in particular has seen around 9 percent fresh open interest on the short side. Importantly, what is crucial is that it was holding that Rs 2,410-2,415 levels very well and yesterday, it has closed well below it.  So, clearly Infosys is giving first signals that maybe the counter is getting weak again. We expect it to retest around Rs 2,275, which is a 100 points dip from here but traders have to keep a stop loss. Any move back above Rs 2,340, I think one should cut the short positions but definitely it is a counter where one can go with fresh shorts today. Q: Bank Nifty is still the outperformer, which banking stocks stands out from that basket? A: Very clearly, it is now, back to buying in public sector undertaking (PSU) banks. Yesterday, we saw Punjab National Bank (PNB) building up fresh open interest. It is more of a catch up rally on the PSU side. All the midcap PSUs have done very well, right from the start of December series. One should give preference to private banks like ICICI Bank and HDFC Bank because they both currently look very strong. They have not corrected even one-two percent on the downside. Among the PSUs, I feel midcap banks like Allahabad Bank, Canara Bank, Bank of India easily have another 7-8 percent move on the upside. For a trading bet one should look at midcap PSU banks. Q: Have seen some long positions being built in metals? A: Yesterday, we have seen a good open interest being built up both in Sterlite Industries and Sesa Goa. They have seen the maximum open interest built up on the long side whereas Tata Steel has seen more of short covering coming in. So if one is looking at the data, then Sterlite and Sesa Goa should be kept on the on the long side.