Mkt may see 4600 if 4200 levels are breached: Sukhani

A: Some of them have bottomed out and have given those dramatic V-shaped reversals. Suddenly they have started jumping up - PNB, Bank of India, Bank of Baroda notably and Indian Bank. Some of the other PSU Banks have done nothing at all for example Allahabad Bank or even Andhra Bank to some extent. So the ones that have given strength, that exhibited strength should be watched for a pull back, where a buying opportunity exits assuming that the Nifty behaves well.

So PSU banks should be divided in two parts - the ones that have not done anything, don’t go bottom fishing there. And the ones that are showing strength are worth buying for a short-term trade.

A: That’s right and for the last two months technology is showing signs of distribution and quite apparently that seems to have worked out. I don’t see anything in technology unless they fall a lot more then they build a base and then they decide to go up, that is going to take sometime, so there is no trade on the long side in this sector.

A: Cairn India is going down probably because it is directly related to the price of crude, though it is not sure. It has fallen by almost 35% and crude hasn’t done that. That also means that if and when crude starts its rally again and which it will, Cairn India will also go up in the same proportion. So Cairn India is a buying opportunity for traders on any initial sign of strength, for an investor there is no need to wait for that sign these are good levels to enter the stock. I am very upbeat on Cairn India.

RPL is a different issue. The stock itself seems to be stuck inside a range and it keeps on pushing on the downside. I am not sure what is happening there but I wouldn’t advise any investing and for traders the opportunity might come on the short side on any rally.

A: It’s just a pullback after USD 147 per barrel; USD 129-130 per barrel is no big deal, remember the move started from USD 60 per barrel. We have seen this in the Nifty, when the it started from 920 and reached 6,350 and so many times we call the end of the bull market and that was patently wrong. So once momentum starts on one side it’s not easy to say it’s stopping. This is a correction now, it could be a deeper or a smaller correction but crude should eventually cross USD 200 per barrel.

A: The first of these points could be, if the Nifty were to cross 4,200 and not close above it, which means it fails to break the earlier highs that by itself would be the first sign that this is not working out. On the other hand the index has to decline substantially to 4,000 to say that the rally is over. So either of the two positions would tell us that this is not going on but as of now we haven’t seen that sign happening.

A: Not SAIL now. But Nalco has rallied and has also moved up above some minor resistance levels. So assuming that you want to buy a metal stock, of the whole lot Nalco would be my preference that doesn’t mean that it is a buying opportunity, it is the best of the lot.

Q: You pretty much hang around here today and tomorrow let’s say the UPA passes the vote and you get a gap up which takes you to say 4,250 plus. On that gap would you sell or would you create a long to play it up another couple of 100-points?

A: Today is not a good day to trade because we can see a lot of small volatile movements, all of it will be choppy. So tomorrow morning, a gap up will essentially be an opportunity to go short not necessarily immediately in the morning but at sometime during the day, which means that after 4,200 this market is going to either face resistance or actually turnaround on the downside. That’s only a possibility but that would be my first possibility.