Expect expiry to be near 5820: Future Capital

Jitendra Panda, Head Sales- Broking, Future Capital, says that he expects expiry to be closer to 5820 on the Nifty. He recommends to buy Cipla for next two days.

Below is the edited transcript of his interview to CNBC-TV18. Q: It has been quite a reversal for this series in the past couple of days itself. What levels do you expect for the Nifty to close today and what would it peg your series performance at?
A: From last six-eight weeks we are grinding within the narrow range and from that range we are now getting a breakout. We see further movement coming; the tailwind is still present and rightly poised. A lot of long positions are rolled over now. The optimism makes us a little caution because in the two days the market has moved. There is already more than 160-180 points up move on the Nifty. 
We are cautious because in the past we have seen that the markets have taken similar type of breakout but again they are seen grinding for more two-three weeks. The positive is happening on the long side, and many high beta stocks are rolling over and they are seeing some action today whether it is the real estate sector or banking sector. Most of these stocks are doing well and the rollovers are on the positive side. Q: Where are you expecting the contract to end in terms of a range and in which specific stocks you may see some last minute either short covering or unwinding?
A: On the Nifty, I see expiry closer to 5820 or at 5800 only because now it is not breaking the 5800, if a breakout happens in last half an hour then it will touch 5820 level before it expires very close to 5800 or 5820. Stocks like IFCI, HDIL, Unitech, HDIL and Cipla are the stocks to watch out for. I recommend Cipla for next few days or for today expiry. Traders can buy the stock with a target of Rs 420 for December series and there could be up spike in today’s expiry.
Among the major rollover, Unitech is showing lot of strength and there could be further rollover or the position getting intraday squared off or there could be a further pickup in the movement. One can buy Unitech with long position and target of Rs 34-35 in December series. IFCI has good financials and it can be bought with a target of Rs 34.
There is weakness among some infrastructure stocks, GMR showed lot of action and it will continue. BHEL is showing negative trend. So, it is a mix bag where financials and real estate is doing well and the Nifty should look at 5820 for expiry. Q: Traditionally, December has been a good month for equities in terms of returns any which way so how optimistic would you be with regards to the December series, hence what would be your recommendations in terms of a strategy for the Nifty as well as the Bank Nifty?
A: Certainly, the Nifty looks positive, the rollover is very strong and rightly timed. In last two days for rollover we are seeing this kind of tailwind so we believe this may continue as external forces are also giving positive signals and the Parliament session is showing some positive sign to continue.
We believe the target could be closer to 6000 range, so we have a strategy to buy at 5800 call and as the premiums increases and simultaneously sell. 6000 could be a psychological barrier where market may take some pause or holding position may not be valid after 6000 in the December series. So, we believe sell the 6000 call and the reduce cost and risk because the market has already seen an up move in last two days today and previous trading sessions.
So, do a bull spread with 5800 and 6000 on the call side. It is better to be long as December has been always positive and good for the market, this time too we are keeping our fingers crossed and the way all the positions are getting built it indicates we could see closer to 6000 range.