Any dip between 7625 aned 7550 is a buying range: Dr CK Narayan, Chart Advise

In a chat with ET Now, Dr CK Narayan, Founder, Chart Advise, says on the upside, 7800-7850 should be the max that one is looking at

ET Now: A very quick view on how would you approach trade until this expiry considering how strongly the market has come off in the session today?

Dr CK Narayan: I think the trend does not get dented in spite of the fall that we have seen today because it is somewhere around 7450-7475. That leaves considerable room for the market to pull back and not really change its trend. Therefore it remains a buy on dip sort of market. Now the question is where do we buy? The earliest point for today would be somewhere around 7625. If you want to take a punt, maybe there will be time for that if it happens now but if it happens later, it may not be so. But I definitely do not believe 7550 is going to be really taxed during any kind of decline. So any dip between 7625 aned 7550, I would use as a buying range.

ET Now: What are the stocks that you would recommend to our viewers right now for a trade?

Dr CK Narayan: It is a bit of a mixed market and not a very good one at that. So be firm with the stops is the first of the caveats that I would start off with. I am having a conditional sell in Lupin. The stock, that has been slipping third week in a row, now is clearly showing no inclination for bottom fishers or only underscoring the point that there are still long positions. People are trying to average down but not succeeding. I think the pressure will continue till this settlement is over. So in the price zone of about Rs 1505 to Rs 1515, I would recommend a short in Lupin looking for a target down to about Rs 1470-1480, can maintain a stop loss at about Rs 1525. On the buy side, I might want to chance my arm with Just Dial, which had a decent breakout over a long-term resistance trend line, drop down near its Rs 725-730 levels so buy at the current price level of about 735-740, add another lot if it drops down to somewhere near 725-730 and stop loss should be below 725, then we can look at a target back at about 760.

ET Now: I do not know how closely you have looked at the options data in the last one hour but based on whatever little you have observed, you had a very interesting view in the morning as well based on the derivative positions, how would you position yourself for the next three days?

Dr CK Narayan: Looking at the options trading pattern of today, it seems to me that most of the traders have actually taken position for a ranging play. You see maximum additions at the 7700 call and put. So clearly some short straddle positions have been taken and this short straddle would have fetched a premium in the price range of about Rs 95 odd from the morning if you take that kind of an average. So I think there is an expectation that 7800 will not be breached significantly or that 7600 also would be not be broken by any significant margin. You have a very large position right now at 7800 call strike. I think the position has almost gone up to about 70 lakhs which going towards the end of the expiry is a pretty decisive kind of OI position. The puts have not seen too much of an addition and I see that the highest position in puts is only about 49 lakh which is a little bit iffy, there is no decisive position down there. I think that unless we get an event or a news break which turns people a little bearish, I do not really see the market going down. So 7550-7600 remains the lower end where we see some supports and on the upside, 7800-7850 should be the max that one is looking at. So I think the short straddle position is very much likely to finish well in the money, if not by expiry but at least much before it. So I think range in trade is what I would stick to if I am playing the index.