Don't see Nifty go beyond 5,480 in series: Hemant Thukral

In an interview to CNBC-TV18, Hemant Thukral of Aditya Birla Money says that the gains of the last few days can be accounted to traders covering their short positions. But with majority short positions already covered, and with more long calls in the market, Thukral expects to see some profit booking come in towards the end of the month.

He goes on to say that traders who have long positions should look to exit once the Nifty hits 5,470-5,480. “We have a target of Rs 5470-5480 and we do not expect the Nifty to go beyond that in this series. So if this target is achieved, one should book profits immediately,” he said. On the downside, his stop loss limit is 5,370 in the cash market segment. Also Read: Mkt to move to 5800 post small consolidation, says Nirmal Bang Below is an edited transcript of his interview with Udayan Mukherjee and Sonia Shenoy. Q: What's the word on the Nifty for the morning? A: There are two important things which we have to understand because from tomorrow onwards the rollovers will pick up. Whatever rally we have seen in Nifty, if we see the Nifty 50 stocks, majority has come through short covering. So majority of the short covering is over and people will now have more long positions. So at higher levels, you may see some profit booking coming in. Momentum is clearly very strong still, so I will recommend people who have already gone long to keep a trailing stop loss of 5370 in cash. We have a target of Rs 5470-5480 and we do not expect the Nifty to go beyond that in this series. So if this target is achieved, one should book profits immediately. So from here on, we have a maximum outlook of 30-40 point more on the Nifty. Beyond that we do not see Nifty going up in the current series. Q: Balrampur Chini is on your sell list today? A: Yes, because sugar stocks saw a lot of shorts build up yesterday, especially Renuka and Balrampur Chini. I have chosen Balrampur Chini because it has broken that very crucial support of Rs 66-67, and now it is clearly heading downwards. Also, the cost has come down substantially, clearly telling that lot of shorts have been pressed. So I am assuming a target of at least Rs 55-56 mark. So for me Balrampur Chini is a sell on every rally from here on, and similarly is Renuka. But I would be betting more on Balrampur Chini because it has shown a lot of substantial run up on the upside now. Q: You have sells on some of the ADAG group names, like Reliance Power? A: Yes yesterday was not a very good day for ADAG pack, especially Reliance Power and Reliance Communication. Reliance Power has seen delivery based selling as well as shorts, so both of them together have put pressure on the stock. Similar to Balrampur Chini, RPower has broken very important support level of Rs 85-86, which is where it was holding for the last three months It bounced from this support level four times. Now yesterday it has gone below that, so the stock may revisit lower levels of around Rs 75-76. But any trader who is going short on these calls should keep a stop loss of Rs 89 on RPower. But I think RPower will go further down, at least 5-7% from current market price levels. Q: Ranbaxy was the biggest gainer yesterday from pharmaceuticals. What would your thought be on that stock? A: It continues to look strong. 14% fresh longs have been added up and the cost has moved up. So for me the next level to watch would be Rs 544-545, which has been stiff resistance for Ranbaxy if you check last six months data. If it manages to cross Rs 545, I think then we can have a substantial rally on hands. But for immediate resistance, I think Rs 545 should be watched as a level. If you are holding long please keep a stop loss of Rs 526 on it. Q: What is a good approach on the Bank Nifty from a trading perspective? A: I think the Bank Nifty is trading in a very tight range. It is not going below 10,200-10,250 levels and doesn’t cross 10,550-10,600 convincingly on the upside. This is because of clear divergence; private banks are still outperforming the PSU banks. PSU banks are feeling heat or pressure at every high level, and I don’t see PSU banks outperforming either. So PNB, SBI which have a higher weightage So I have a feeling that Bank Nifty will find it very tough to cross 10,550-10,600, and on the downside 10,250. So traders have to trade within this range 350 points in Bank Nifty.