See April series expiry around 5260-5280: Aditya Birla

With a slightly bullish view for today, Hemant Thukral of Aditya Birla Money says the April series may expire around 5260-5280.

In an interview to CNBC-TV18, Thukral says rollovers into the May series have picked up in the last few days, but that rollover cost has fallen. “This means that there are some fresh shorts being built up in May on expectations that the 200 DMA may not hold itself,” he explained. On the options front, Thukral says the 5000 put options have the highest open interest, which indicates a support for the market around 5000-5050. On the upside, call options are in the range of 5400-5600, which means short covering will kick in if the Nifty scales the 5400 one more. Below is an edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video. Q: What kind of rollovers have you seen so far into the May series and how are you mapping the first part of the series? A: Rollovers are well above average now. Rollovers were not picking up in the past week, but in last two days it has picked up, both on the index futures as well as stock futures. What is slightly disappointing is that the rollover cost has come down in last two days, which means that there are some fresh shorts being built up in May on expectations that the 200 DMA may not hold itself. Even if you see the way put calls are behaving, 5000 put is the one which has the highest open interest in May. In fact, it’s 38 lakh shares which is the highest across all options. So clearly the base of the market established by writers is 5050 and 5000. On the upside, I think calls right from 5400 to 5600 are being written. So any move towards 5400 you will see resistance coming in. If I have to say for today itself, I am expecting some short covering in the later half, so I would be slightly bullish for today. Today I am expecting expiry around 5260-5280. Q: What activity are you seeing on the Bank Nifty specifically going into the next series? A: That is one area where the concern has started coming in. The Bank Nifty did not break 10,000 yesterday also, but the rollover cost is starting to dip which is giving me concern. Among all the banks, the only one where cost still is intact is HDFC Bank which has always given preference. So if somebody wants to take a bet on banks, I think HDFC Bank still holds the best bet. Keep a stop loss of Rs 535-540 and you can easily see it going up back to Rs 575. But apart from that, the rollover cost for PSU banks is definitely coming down now which is not a very encouraging signal for the market. Q: You got a strategy on Apollo Tyres today? A: Auto clearly is the one sector which is still showing lot of long rollovers. Apollo Tyres is a midcap in it which has shown substantial jump in the rollovers, above six months average. Moreover, the cost is really bullish so I am expecting at least Rs 97-98. The base for Apollo Tyres has been Rs 87-88 so that should be maintained as a stop loss. Q: Any thoughts on any of these telecom or IT stocks and what kind of formations you are seeing now given the turbulence of the last few days? A: Among IT stocks, I think TCS and HCL Tech are showing very good rollovers with the rising cost. I don’t see them being penalized in the same manner as Wipro or Infosys. I think at every dip you will see buying coming in both of them. In fact TCS is looking quite strong to me. So I think in any of the dips these two will show a substantial buying interest. On the telecom side, I am interested in Bharti. Bharti has already approached Rs 290-300, which is a very strong support for it, and the way the rollovers have started jumping in last two days with stock rebounding from Rs 300, I think Bharti is a very good bet. So in IT, TCS and HCL Tech, in telecom Bharti should be kept on radar.