See Nifty at 5950; Jan series to gain mid-month: HDFC Sec

In an interview to CNBC-TV18, VK Sharma of HDFC Securities predicts the market’s performance in the days to come. Sharma opines the Nifty will continue to trade at 5950 until and unless any positive news flow regarding the US fiscal cliff makes its way.

Also read: What's lined up for Nifty in 2013? "We will be somewhere between 5850 and 5900. So this is what my prognosis is for the Nifty and for the January series I think most of the gains will have to wait till about January 15," he adds. Below is the edited transcript of Sharma's interview to CNBC-TV18.
 
Q: There were no opportunities to trade on Monday because of how narrow the range was. Would you advise any strategy on the Nifty today? A: The Nifty will still continue to trade at 5950. I do not see a close above that till ofcourse there is some very positive news from the US. The positive news can be in terms of either postponing the deadline, kicking the can down the line or maybe really finding out a solution, but that has to happen tonight for the Nifty to react tomorrow. We will not go down and 5823 will continue to hold on. So, we will be somewhere between 5850 and 5900. So this is what my prognosis is for the Nifty and for the January series I think most of the gains will have to wait till about January 15. Q: The suggestion is that it is the Bank Nifty that is beginning to show signs of pressure. How would you trade that in your part of the market? A: I do not think Bank Nifty will show a lot of pressure today, at least in the current series, because the rollovers have been quite more than normal. So unless it breaks below the level of 12,200, I do not see pressure coming back on the Bank Nifty. But if 12,200 level is broken, then of course because of the fact that you have had a very high rollover, which is almost 29 percent as compared to 19 percent that happened in the last series, Bank Nifty will live to fight another day. Q: Many of these auto stocks saw some shorting activity, a sell off on Monday - the likes of Exide Industries, Ashok Leyland, from the heavyweights Maruti as well. Any ideas that you would want to give us from that space itself? A: If you were to talk fundamentally then of course Amara Raja Batteries looks better, but that is not in the derivatives. Exide does look weak and it can fall another Rs 3-4. Another auto stock which is weak is Ashok Leyland but I would like to buy a Put in terms of Hero MotoCorp where I am suggesting buying the 1900 Put at around Rs 22, keep a stop loss of Rs 10 and hope to sell it at Rs 50 making Rs 28 in the process. Q: Do you have a trading strategy on National Hydroelectric Power Corp. (NHPC)? A: NHPC has surprised us in terms of the gains and largely because of the fact that more capacity is coming up. This is a stock which is essentially a dividend yield stock, basically a stock for pensioners. I am suggesting buying the 22.5 Call at around Rs 1.20, it quoted at Rs 1.60, so only if you are able to get at Rs 1.20 levels only then buy this. You can hope to make some 40-50 paise more on this. Obviously, you need to keep a stop loss at 80 paise in the Put that you buy. Q: You have a couple of these names from the media space on your list, a call on Sun TV Network for the day. Tell us about that? A: Sun TV is a stock which has a presence in all the segments of media and they are going to benefit by virtue of the digitalisation which is going to happen now beyond the metros over the next two years. It also was one of those stocks which did well on Monday. I am suggesting buying the 420 Call at around Rs 5 and keep a stop loss at Rs 2 and hope to sell it around Rs 12. It closed at Rs 419 on Monday. Another stock that can be looked at is in terms of buying is Zee Entertainment where a lot of open interest was added. But the stock was unable to maintain its highs. It closed at a substantial discount to the levels at which intraday highs. Q: How would you approach some of these names like Hindustan Unilever Limited (HUL), ITC etc. for trade? A: These are the stocks which will continue to do well whenever the markets come under pressure. However, not ITC but Hindustan Unilever had royalty issues. My own sense is that as compared to HUL, I think there will be more takers for ITC at dips.  Gradually, HUL will see investors weaning away from that stock and looking at other options which are emerging whether it is Godrej Consumers, Tata Coffee or Tata Global Beverage.