'See aggressive shorts being carried to July series'

In an interview to CNBC-TV18, Hemant Thukral of Aditya Birla Money spoke about the outlook for the F&O market and his recommendations on various stocks.

Below is a verbatim transcript of the interview: Q: Your big day, disastrous series, how are you guys moving into July on the Nifty first? A: It has been a complete washed-out series for us. The way the over pessimism is counting in July, the rollover cost has drift to 0.01. I have not seen this cost in last 15-18 months. It is clearly telling that everybody is going with aggressive shorts in the next series. Yes, the mood is pessimistic but this now seems like a silver lining here because everybody is short at every scrip. All banking stocks have one side short being rolled to the next series. The market may rebound first a little bit. We have been saying of rebound from last three-four days and that has not sustained yet but now it seems all things are going short. I would be playing for a small rebound till 5,750. Today's opening is giving me some more heart. So, if it sustains above 5,630 then it can go ahead and retest 5,750 on the upside. From thereon, the real trouble starts because for July series, the 58 Call writers are active already. So I do not see Nifty crossing 5,810 or 5,790, which is a 200 days moving average (DMA). That will be a struggling point. The immediate answer would be that I would be going long at these levels keeping a stop loss of 5,590 and playing for a pullback till 5,750. Q: The biggest disappointment in this series is what has happened with the Bank Nifty, what kind of positions are you seeing getting rolled over into the next series, are people still short that index? A: Completely. We have seen a big drag on Nifty by Bank Nifty this series. As a result, even in the private bank , which was showing so much strength prior to this June series, people have gone heavily short in July also such as Axis Bank, ICICI Bank, you can rule out HDFC Bank to a limit because that is not a trader’s stock in any case but in ICICI Bank, Axis Bank across the board shorts have been rolled to the next series. Sometimes over pessimism also can lead to some pullback coming back into the market because it seems that everybody wants to go short on this market at every higher level. Everybody is checking dollar/rupee every morning but the way the positions are being rolled at this cost, it is very difficult to go short at these levels. So I would be waiting. In Bank Nifty I will not go short before 11,500. So I will be looking for a pullback of at least 2-3 percent on the main index Bank Nifty itself. Q: Have you seen any positions being built on Reliance Industries Ltd (RIL) or Oil and Natural Gas Corporation (ONGC) ahead of the gas meet? A: If banking is being treated as a drag, oil and gas space has saved us. RIL has to go above that Rs 825 to give us a serious rally till Rs 865-870 but having said that the way positions are being built up, I will be playing positive on RIL. I will be watching GAIL also very closely. Already 72 percent positions have been rolled on that stock. So these two stocks should be kept on the positive radar side.