Nifty may break 5850 on current moment: HDFC Sec

The NSE Nifty closed marginally lower yesterday, shedding 13.95 points to 5,649.50 after a volatile trade. The market has been in a consolidation mode, moving in a tight range of 5,650-5,700 for the fourth consecutive session on Thursday after rising over 2 percent last Friday.

The way market closed yesterday may have given many market participants a feeling that bullishness is over and some correction in likely in the October series, VK Sharma of HDFC Securities said in an interview to CNBC-TV18. However, Sharma expects the current rally to extend. Support for Nifty is seen at 5,600 and one can expect it to breach the psychological level of 5,850 going ahead. Meanwhile, with the cable digitisation becoming mandatory from November 1, he suggests strategies for playing media stocks like Zee, Dish TV and Sun TV. Below is the edited transcript of Sharma's interview with CNBC-TV18. Q: Give us a word on what you are seeing as the initial trend for the October series? A: October series still augurs well. There is more steam left in the market.  The way market closed yesterday, it may have given people a feeling that bullishness is over and therefore one can look forward to some correction in the October series. My sense is that this rally still has some legs. 5,600 is going to act as a good support. It may cross the 5,850 psychological hump that people have in their minds. Banking will again take the lead in terms of leading the markets higher. Q: Where would you place your bets this morning in terms of atleast the Nifty counters? A: If I have to choose a largecap then perhaps State Bank of India (SBI) will still continue to be a good bet for intraday. There is good Rs 20-30 to be added in terms of gains if you buy in the open. If you were to play for the whole of this settlement, then my sense is that on November 1, you have the date on which the digitalization becomes mandatory in the four metros. If you want to play that then you need to look at the stocks in the media sector. Sun TV has moved up for the first time and a meaningful open interest has been added yesterday. Buying a Sun TV Rs 340 call and waiting out for the entire series could be a good strategy. If you want to look at other stocks in the sector then maybe you can also look at Zee and Dish, but the favourite would continue to be Sun TV. Q: Would you buy any of the midcap financiers from PFC, REC, all the way upto the midcap banks, any strategies? A: The best infrastructure play would continue to be IDFC but if you were to look at banks, my sense is that among the smaller banks, Dena Bank worked out quite well yesterday. It was normally against the general trend of the banking sector where a lot of open interest was lost. This is a bank that built open interest. I am suggesting buying the Rs 110 call at around Rs 3.4, keep a stop loss at Rs 2 and you would possibly double your money or the amount of premium that you put possibly you could end up selling at around Rs 8. Keep a stop loss of Rs 2 and buy this 100 call at Rs 3.4. Q: Today it seems like some of these oil and gas heavyweights might support the market Cairn, there is Reliance Industries also, there is GAIL as well, from this pack which stocks would you prefer? A: Cairn is also good from the perspective that it has come down largely because of the fact that stocks were sold at a discount. There is no other fundamental reason. With the perk-up in the dollar yesterday on Iranian concerns in crude, my sense is that Cairn could possibly give you Rs 5-6 today but not beyond that. It is not y the time to build long positions, but good fundamentals do give you some support, it is a trading play at best today.