Traders must buy at every dip & breakout: Sukhani

Excerpts from CNBC-TV18's exclusive interview with Sudarshan Sukhani:

Q: Do you think we’ll breakout of that 5,000 range today or next couple of days, is that looking like a possibility?

A: It’s a possibility because the short-term trend has been up since the last week and the global cues are suggesting that something more is going to happen today and hopefully next week. So it’s quite possible that 5,000 could be broken out and that is only a probability. We’ll have to see what the market actually does, but what are the views? The question here is that what should the traders do, and what should investors do.

For investors the scenario is little more confusing, first you need a breakout to confirm that the base has been build and the Nifty has enough momentum to go up. Now buying on a breakout has its own risk, so the ideal way would be, the break out will tell us that trend has changed to up and wait patiently for a corrective down move to enter the market. Ideally investors must also think that this could be a bear rally, it has all shape and contours of a bear market rally and on the higher levels they have two choices, they can go and sell some of the stuff that they have today and that would be a wise decision also, so it’s a personal call.

For traders this is a no brainer up and the trend has been up and it could continue to be up, buy on every dip, and buy on breakout.  

Q: What are the charts of Reliance Industries and RPL suggesting?

A: RPL has made a strong base a bullish pattern and is breaking out of that pattern. Surprisingly from RPL and Reliance, RPL is the better chart of the two although both of them are excellent. Reliance as I explained earlier is out performing the Nifty, it broke out of a trading range even when Nifty was inside that range, and now it seems that it was showing us the way. So the pattern target for Reliance is more than Rs 3,100, assuming that the market holds on its own and RPL could be much more ambitious. So the trade here is primarily in RPL rather than Reliance between the two, but both of them are on the long side.

Q: Which are the good looking charts in the textile space? We have seen some action in S Kumars, Arvind Mills, Alok Industries, Welspun anything which caught your eye?

A: Yes, Alok Industries and SKumars; S Kumars because of the sharp decline, it had earlier suffered and Alok because it has been building reasonably decent base and is now breaking out of that. Within this sector these two are the better candidates but the sector itself is doing some interest things. It’s far better to concentrate on better one rather than to go for Arvind or something else.    

Q: Two midcap technologies i-flex and Aptech?

A: Aptech has an excellent chart; first it fell from Rs 450 to Rs 150 and now it’s building a base getting ready for a rally and there is a lot of headroom; it could go anywhere and stop because it has seen much higher levels.

Aptech is a trading opportunity and for short-term investors who are prepared to take risk. It is also an investment opportunity. I don’t track i-flex but in general I am upbeat on IT stocks for sometime.  

Q: Did you look at some of the media stocks which fell yesterday Zee Entertainment ,Balaji Telefilms. What are they looking like?

A: I track Zee and Zee has been a big disappointment. It hasn’t recovered from the declines even though we have seen some of the other stocks do that. I don’t track Balaji Telefilms but I don’t think that generalising the media because there are stocks in the media which are more attractive and which are slowly moving up, NDTV is an example and I also own NDTV.

cont on pg 2..