Plenty of put options are available right now: Devang Visaria

It is a given that most of the counters would open with a bit of a gap down. Now, taking into account that the stocks may open 3-5% down, are there any stocks that look attractive sells for a day?

There are plenty of put options available right now. You could buy put options on liquid stocks like Tata Motors, which is looking weak. We are looking for a big head-and-shoulder formation on Tata Motors on the daily chart, so that should give a 10-15% decline. So, put options are very liquid and it is a safer way to trade. You could buy put options in Tata Motors. You could even sell IDFC futures and buy the call option. That way you have a synthetic put option running. One has to innovate and strategise if one has to manage the risk.

The point is these stocks are expected to open with a gap down assuming that Tata Motors opens with a 5% or 6% gap down and the put value would rise accordingly, would it still be worth to take a call?

It would be very much worth to buy the put option because once you buy the put option, you are locking in your risk, but if you are short in the future, the psychology would play and if you see a 2% pullback on the short position, I doubt how many traders would be comfortable holding onto their shots because the whole world generally has a bullish outlook on the markets.

There is a contrarian call coming in on the auto stocks right now. What you are going to pick after this fall?

I would go in short right now rather than worry about what to pick up after the fall. We will get enough time to select the stocks we want to buy, but if one is still interested in picking up on the long side, you could have a pair trade running. You could be long Ashok Leyland and short Tata Motors on an equal valuation.

Ashok Leyland has been showing relative strength even though Mangal Keshav is bearish on the stock. What is your sense?

Ashok Leyland is generally one of the last stocks to move up in the auto pack and it outperforms on a relative basis very strongly. Even on an absolute level if the markets were good, the stock would have performed well but since the overall scenario is looking a bit bleak, I doubt how much upsides would be there in this stock. But if one still wants to go long, you should have a pair trade running, you could be long Ashok Leyland and short Tata Motors or even Maruti from these levels.

You have sell recommendations this morning, obviously you are not looking at picking up anything in this market. You have a sell on Century Textiles as well with a target of anywhere between 440 and 455.

There is a bearish head and should formation on Century Textiles as visible on many other stocks. The list could be run at least into 15-20 liquid option stocks where you could see very bearish formations either a head and shoulder or reverse flag pattern, very classical patterns and immediate impact will be very much visible on the charts and apprise most today itself. The targets which I have given for the immediate two to three-day perspective but on a medium term basis, you could have significant downsides even from those levels. So, one should be brave hearted and go short and maintain discipline with the stop loss specified.

GMR Infra and JP Power are among a couple of counters that corrected significantly yesterday. Have you looked at the charts?

We have been having a negative bias on GMR Infra since it broke below 65 levels and it is right now around 55 or so. It is again on the verge of breaking some important six-month consolidation you had between 54 and 75 kind of levels. So, there is going to be a slow and steady downside on this stock going ahead also. You can possibly look for targets closer to 48 kind of region.

JP Power has been one of the laggards really in the active midcap space. Generally, this stock was very much a trader favourite. You would find it rallying along with the Chambal and Nagarjuna of the world. But this time around, it has been significantly lacking that punch which you see in this kind of an F&O liquid midcap stock. Again, you can possibly look for a target of 64 or 62 on the downside.