Doubt 1st half of Nov; DLF at Rs 200 is good buy: Bhamre

Angel Broking's Siddharth Bhamre explains to CNBC-TV18 that he is skeptical on the first half of the November series and adds that DLF at Rs 195-200 is a good buy.

Below is an edited transcript of the analysis on CNBC-TV18. Q: It has been a steady day so far. What do you expect to see in the last one hour?
A: We are not so very positive on the remaining part of the series. The mini-Nifty, on Tuesday, rolled over only 18 percent which was scary because at around 5,750, the traders had gone long and were not rolling over positions from those of October.
So, we were anticipating that the min-Nifty would crash. But throughout the day, the rollover in the mini-Nifty has been 45-46 percent. So though there is reduced expectation of a crash, there might be some correction from current levels in market.
At the same time, the current sentiment is completely the opposite to the positive mood observed at the beginning of the October series with expectation that the Nifty might perform in the first week or the first-half of October. This reverse of sentiment is because of the high rolls in mini-Nifty.
So we are not going into the November series with a very positive bias. We expect probably that this much-spoken support at 5630-5640 will go. Once that support is breached, we do expect a crash but probably 5600 or 5580 is where most of the weaker hands would be out and then probably, there will be the start of a fresh run.
For today, I expecting a downside from current levels and from a positional perspective, investors who are long might probably square-off and initiate fresh long-positions around 5,600. Q: Which stocks do you expect to come under pressure on your call that the market will give up a bit more ground in the next 45 minutes?
A: It is difficult to state that, but PSU banks such as SBI and PNB that would be facing pressure. Some stocks like Tata Steel with a low rate of rollovers needs to be kept an eye on. Among the defensives, ITC and HUL are the two front runners on the downside which are expect to lend pressure on the market in this last half hour. Q: What kind of strategy would you recommend for the first part of the November series on the Nifty?
A: We continue with the strategy of a 'buy' at 5,700 and both a 'call' and 'put'. On the first half, investors could ride more on the rise in implied volatility and rise in the value of delta of the 'put' option. So that is one strategy.
At the same time, positional traders thinking about markets going to higher levels of 5,900 or 6,000, which may happen eventually, should book profits in some of their long positions. If somebody does not want to buy 'straddle', then ideally buying 5,600 or 5,700 'put' of November series is also advisable.
The broader call is that there might be a fall of 100 points which would lead to weaker hands moving out of the market and stronger hands again starting a run. From that context, we are skeptical on the first week of November, so buy at the money-put options or just square-off your long positions. Q: Any fresh short positions that you have started seeing building up for the November series either in pockets like real estate, infrastructure or public sector banking?
A: There are no fresh short positions in public sector banking, as the shorts are already there. So, that is the reason we mentioned that there would be some pressure on SBI and PNB. But from a positional perspective, we saw short positions forming in real estate.
But this sector may not have a major impact on the market because of the weightage. DLF at Rs 195 to Rs 200 is a very good buy and we would avoid getting into any of the midcap stocks which have been battered in this market.