Exit naked shorts in Reliance, HDFC Bank ahead of results, warns market expert

Investors carrying short positions in Reliance Industries Ltd and HDFC Bank into a crucial earnings weekend should cut exposure immediately, according to market expert Pradeep Haldar, who warned that unhedged bearish trades could backfire sharply if markets open higher on Monday. With Reliance’s results due later in the day and HDFC Bank’s numbers expected over the weekend, Haldar’s message was blunt: this is not the time to run naked shorts.
 

Earnings risk takes centre stage
Responding to a viewer query on short positions taken in Reliance at 1,320 and HDFC Bank at 820 for July expiry, Haldar said traders should first focus on reducing risk rather than trying to outguess earnings. “Pehle apna short ko katiye,” he said, arguing that the current market setup does not support aggressive downside bets.

His caution comes at a time when both stocks carry heavy index weight and can influence broader market direction. In the wider discussion, Haldar had already flagged that a large chunk of Nifty’s weightage was headed into a result-heavy weekend, making Monday especially important for market positioning.

Why the downside trade looks risky
Haldar’s core argument was that the market has shown unusual resilience despite geopolitical stress and headline risk. “Market react karna band kar diya hai negative news par,” he said, pointing to the lack of sharp damage even amid recent tensions around Hormuz.

That resilience, in his view, reduces the probability of immediate heavy selling in Nifty and Bank Nifty. If earnings from either Reliance or HDFC Bank surprise positively, traders on the short side could be trapped in a sharp opening move. As he put it, “Agar Monday gap up ho gaya na, na ghar ka na ghaat ka,” Halder cautioned. (If there is a gap-up on Monday, one may fall between two stools)

No room for unhedged bets
Even if Reliance were to deliver a weaker-than-expected print, Haldar suggested the risk-reward still does not justify carrying exposed shorts into the event. A negative surprise may cause only “ek chhota sa jhatka,” he said, while the upside risk from a stronger print could be far more punishing for traders.

He also questioned the construction of the positions, saying that if such trades were taken at all, they should have been hedged. “Open naked aapko short nahi rakhna chahiye is time par,” he said.
 

What it means for traders
The broader takeaway is clear: in a rising market with strong momentum in benchmark indices and major earnings around the corner, directional shorts in heavyweight stocks can quickly turn into high-cost mistakes. For short-term traders, Haldar’s advice reflects a larger market truth this earnings season — preserving capital may matter more than chasing a speculative downside call.