Liquidity strong, Nifty heading towards 6150-6200: Bhamre

In an interview with CNBC-TV18, Siddharth Bhamre of Angel Broking, spoke about his reading of the market and his outlook.

Below is a verbatim transcript:
 
Q: What is the futures and options (F&O) data suggesting for the Nifty for the rest of the series now? A: We have been saying that whatever little correction this market has shown from resistance of 6,030-6,050 -- which the technical guys are talking about -- has happened mainly because of long unwinding. We did not see any formation of short positions. Now when market is bouncing back from lower levels, we are seeing formation of long positions in Nifty, Bank Nifty and many of the largecap names. At the same time, I also look into the liquidity scenario -- yesterday's domestic institutional investor (DII) sell figure Rs 1,200 crore and foreign institutional investors (FIIs) despite that deferral of two years have not touched them to buy immediately. This clearly says that whether general anti-avoidance rule (GAAR) or no GAAR, liquidity is going to come in our market. Had it been only GAAR then yesterday you would have seen probably Rs 2,000-3,000 crore of buy figure from FIIs but that is not the case. Also read: TCS sees stable pricing in 2013, to hire 60,000 more The point we want to highlight here is liquidity remains strong. Whether people are comfortable with valuation or not, I think markets are heading higher. If I assist some of the liquidity parameters, crude oil is steady and moving higher barring one-two days correction here, which is a direct correlation with the market and the liquidity, which is doing good. If you track US bond yields, 1.8 to 1.85 was a good resistance. I think the yield is now heading towards 2 or higher levels, which clearly suggest that people will not be interested in putting money in bonds as of now there. So the liquidity would come into equities and emerging markets as well. If you look at the comfort level that people are deriving from European economies, look at the yields of Spain and Italy -- these two big names which were in problem in Europe -- the yields are going down significantly. In fact one of the yield is now below 5 percent, which clearly states that people are now comfortable with whatever major issues they had with global economies. So now, whatever liquidity is getting generated, whether in US or Europe, is moving into equities. All these factors club together, we are bullish on markets as far as liquidity is considered. Even if you take the domestic versus FIIs, weaker hands are more into Put options, they are buying Put options, they are not trading with positive bias. At the same time, the same point, which we had emphasized since last two-three months that equity is moving from weaker hands to stronger hands, continues. So there is no one particular reason from F&O data or liquidity that we should change our view and become bearish on market only because it has gone above 6,000 levels. We are heading higher, 6,150 to 6,200 is what we are anticipating. _PAGEBREAK_ Q: What is the trading call on some of these frontline IT stocks this morning? A: I think the upside is limited from here. We may not see significant upside. Infosys, on the result day, saw a huge amount of short covering plus formation of long positions. So people, who are seeing only 17-18 percent built up that has resulted into huge run up in the stock, would be drawing a wrong conclusion. Shorts are already out of system. Whatever might have left would have gone yesterday because stock again added 4-5 percent in open interest (OI). I would be shying away from IT not because I am expecting huge correction in them but the risk reward ratio certainly is not in favour. After Infosys results, I think around Rs 1,280-1,300 Tata Consultancy Services (TCS) was a good buy, which gave you 40-50 point bounce. Again here, I am not seeing much room left for the upside. I would not initiate long positions on TCS and would suggest to book profits but one should not short. Q: Any action that you are spotting in the real estate stocks in the futures market? A: Yes. We are seeing DLF showing a lot of buying interest especially in cash market segment. I feel this stock will find it very difficult to move above those resistance levels, which it created sometime back around Rs 255-260 levels. So buy-on-dips would be a strategy over there. HDIL, Indiabulls Real Estate most of them are showing good cash base buying.