See rangebound Aug series with -ve bias early on: Angel

Speaking about his outlook for the August series, derivates analyst Siddharth Bhamre of Angel Broking says he expects markets to be rangebound: a slight negative bias early on followed by bounceback."Above 8,600 we see people getting bullish and below 8,300-8,200 people getting bearish and we believe that coming series may not be much different," he told CNBC-TV18's Sonia Shenoy and Anuj Singhal in an interview.Excerpts from the conversation.Anuj: Let us talk about the August series then. The last two three series has been volatile but the market has not moved much. What is your call for the August series? A: My call is that market has not moved much since last seven months and we are in a very broad range where above 8,600 we see people getting bullish and below 8,300-8,200 people getting bearish and we believe that coming series may not be much different. But, to get into nitty-gritty of data, we are seeing that highest built up is in 9,000 call option. That does not mean that we are heading towards those levels. More seemingly important level now would be around 8,800-8,700. I will not be surprised if we go there and at the same time, the support looking at the options data is now emerging somewhere around 8,150-8,200 levels. So, probably we would still remain in a range. The range would probably shift higher. But, this is not going to be a run-away rally kind of series where you would see a big fall or probably a big rise in market. So, you want to be range bound. If you see higher implied volatilities (IV) then one should do a short strangle.Sonia: By the end of this series the PSU banks have made a fairly good comeback, Bank of Baroda today is up about 10 percent, in the August series would you recommend trading any of these banks?A: We have been fairly bullish on PSU banks, we did some long trades over there but we are out of it now. Whatever bounces which were happening, you guys were just talking about it a while back, it is more of a short-covering bounce. Whatever long positions if at all also getting formed are not those positions which would be getting carried forward from series on series. So, I am not very optimistic from an investment perspective at this point of time, I would wait for dips to buy these counters. I am not running behind any single stock in this market because this market is a range bound market, so if you have missed out on Bank of Baroda, don’t panic right now and buy at these higher levels. If not in beginning of August series, by end of August series you might get again back to lower levels.Anuj: A lot of these high beta names have moved today Unitech, GMR, Adani, DLF, Reliance Infra, Jaypee. You could have picked any stock and you would have made money today but was this just an expiry play or do you think they will have some momentum in the August series?A: If you would have picked up any stock, probably three months back you would have lost money for sure, so one day if these stocks are bouncing, I wouldn’t read too much into it but from data perspective we have seen that there was a huge built-up which happened in these counters whatever names you took and maybe this is a short covering rally which we are seeing, barring DLF where we have seen formation of long positions also from lower levels. So, I won’t give much thought on these moves and would shy away from these counters barring DLF.Sonia: What about some of these counters like Cipla and Dr. Reddy’s, how would you approach them? Both of these stocks are actually one of various movers in this series.A: In pharma space we have been fairly optimistic on Dr.Reddy’s and we have been buying and suggesting to buy to our clients, so we maintain that view. Cipla also we have just initiated longs because has happened technically and we are seeing formation of long positions, so we continue to remain bullish over there. Some of the names which we are not optimistic in this sector and we are seeing huge formation of short positions with good rollovers is Lupin. So, a while back we have seen that there was a significant fall and then there is a bounce which is probably making people feel that the worst is over for this counter but the kind of rollovers and the positions which have been formed, Lupin would make new lows, so I won’t be going long over there. I will be very selective in pharma with Cipla, Dr. Reddy’s and to an extent related space Biocon as a buy whereas stocks like Lupin, Sun Pharma I would be on the sell side.