Street signs: Traders eye 18,400 on Nifty, go short on Bajaj Auto, and more

Traders eye 18,400 on Nifty

The benchmark Nifty close above 18,000 has given more ammunition to bulls. Market watchers say traders have mounted bullish bets on optimism that the index will touch 18,400. The Nifty on Friday closed at 18,103. Technical analysts believe the market trend remains positive as long as the index sustains above 18,000. “For the trend following traders 18,000 would be the sacrosanct level,” said  Shrikant Chouhan, head of equity research (retail), Kotak Securities. “As long as the index is trading above the same the uptrend wave will continue up to 18,200-18,400, while on the other hand, a close below 18,000 could increase further weakness till 17,850-17,650.”

Latent HNI bets on thin ice

The high net-worth individuals (HNIs) have placed bids totalling Rs 78,498 crore on Latent View Analytics, whose IPO at 339 times has become the most-subscribed ever. The HNI portion of the IPO has garnered 882 times subscription. According to market players, the breakeven cost for wealthy investors, after factoring in the borrowing cost, works out to Rs 325 per share. In other words, HNIs will make money on the IPO, if Latent View’s shares gain at least 2.7 times on listing. “It is dicey. The costing for HNI works out to Rs 325-Rs 330 per share. The grey market premium suggests the stock will gain about Rs 300,” said Arun Kejriwal, director, Kris Capital, a research firm.

Go short on Bajaj Auto, long on Wipro

Quantitative research analysts are suggesting traders to go short on Bajaj Auto and simultaneously build a long position on Wipro to benefit from the impending Sensex rebalancing. According to analysts, the two-wheeler manufacturer will be replaced by the software exporter in the 30-share index. One analyst said the trade will remain active till the time of announcement, which is expected this week. Wipro’s Sensex inclusion is expected to result in passive inflows of $150 million, while the exclusion could lead to selling worth $75 million in Bajaj Auto, as per an analysis by Abhilash Pagaria of Edelweiss Alternative Research.