Do not buy on this pull back: Sudarshan Sukhani

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

Q: If there is a pullback as looks likely this morning. Do you buy that pullback as a trader? 

A: Not yet. We have seen that the Nifty had rallied 20% from its lows that’s a bear market rally. We were all waiting for it and we have got it. We need to find out whether this rally is over or whether this is the beginning of a bull market. I am not going to buy a pullback today, we have to let this market stabilise for the next two-three days for us to find out which way it is. So today is probably not a good day to buy.   

Q: For a person who is holding long should he cut longs after today’s gap down or should he hold on and play for higher levels on the Nifty? 

A: For a person who is holding long positions in the short-term today is a good time to get out of the market and step aside. I have numbers of 4,300; so far as the Nifty holds above this my short-term trend remains up. So one needs to find out today if it holds above this or not. That’s the point below which I would assume the short-term trend is over. So that number can be kept in mind, a trader can simply say, that he will close his positions below 4,300 or a much wiser option would be to get anyway. 

Q: Technically from what you have seen these past five days, does the upmove seem more durable as well than what we have seen? 

A: As of now I would still call it a bear market rally; we have seen five days of back-to-back gains and yesterday a small narrow range day breaking down. These sharp sudden spikes are classic example of how a bear rally develops and moves on. Bull market does not start with this kind of a big bang; it starts slowly, softly almost without anyone knowing that it has begun. I do not see this as a start of a bull market. If it is not, then it’s qualified as a bear market rally and we could have seen the top of this rally yesterday at about 4,550. So for the Nifty or for the market if it is going up, the first step will be for the Nifty to go above 4,550 and close above it till then I would be on the bear side.   

Q: Are there any signs that crude is trying to put in a bottom after its recent fall or do you think it can slide much more? 

A: It could slide up to USD 120 per barrel without affecting the short-term trend also so it hasn’t broken USD 120. It will keep on finding space here in USD 120-125 range and eventually rally again. I do not see crude on the charts giving any signs of weakness. This is a small dip; every rally will see these dips.   

Q: How would approach trade for starters 4,340 thereabouts Nifty? 

A: I would expect some kind of a rally to come in the day and that rally would be shorting opportunity although the Nifty has not broken 4,300 but it has come very close to those levels. So I would read that as a sign of weakness. My stop losses would be yesterday’s closing price somewhere around 4,430. 

Q: What level on the Nifty would indicate resilience to you though or the fact that the market is not breaking down?