Nifty may breach 5300 levels: Sukhani

Sudarshan Sukhani of Technical Trends estimates that the Nifty is likely to breach the 5300 levels. The market is still in the process of consolidation, he feels. It may move sideways or downward, he feels. It may not move substantially upward, he said.He sees support at 4950, though. Investors should go short whenever possible, Sukhani said.

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

Q: Technically what is the picture like do you think we will make it back to 5,300 where we slip from last time?

A: That seems to be the likely scenario but there is a question of time. I don’t think we are going to rush and reach 5,300 very quickly. The charts suggest that we are into a process of consolidation rather than expansion on the upside, now this consolidation could see the Nifty move on the sideways, it could also see the Nifty slide down again.

We have strong support around 4,950, so I don’t think we are going to break that support but we could easily see lower levels in the short-term. One major factor that is disturbing me now is the absence of leadership from the Information Technology sector. This sector was leading almost by stealth, people did not realize that the IT stocks have moved up 50-60-70%, as Infosys did from Rs 1,200-1,950. Now almost all major IT stocks are giving signs of distribution.

So the leaders of the earlier rallies are telling us that they are getting exhausted. I don’t see the markets moving up substantially which means short-term trade should be carried out stop losses should be used and be prepared to go short wherever possible.

Q: How would you play them technically now the likes of SAIL, Hindalco, Tata Steel?

A: Out of them Tata Steel is best of the lot, so as a trader and as an investor I would buy Tata Steel whenever the opportunity arises. For example if there is a dip in the market in the next 2-3 days assuming there is one that would be a buying opportunity.

For the other stocks just think of them as the momentum stocks riding the way with Tata Steel rather than independently doing anything else. So for the broad sector as such I would stay away, I don’t think this is the time to enter they are probably peaking out rather than giving any new entry opportunities but it’s a strong sector, so don’t go short on it.

Q: Two big gainers from the midcap space Mercator Lines and Lanco Infrastructure?

A: Both have excellent charts. anco after a very sharp correction, I think its beginning an upmove which could last longer than we think. So here is a stock that people should be buying on dips and put that on their watch list, look at it in intra-day also.

The whole shipping pack was also going up earlier. So for me it was difficult to make a call whether this is sustainable or not I have found that shipping usually gives these sharp uptrends and then almost goes to sleep. So anyone wanting to buy stocks like Mercator Lines should be prepared to exit if the stocks are doing nothing.

Q: What would you play for in terms of levels on Cairn?

A: Cairn India is in a long-term uptrend so the levels would always be seeking to buy that stock and may be to take profits. There is no way I would be looking to go short or short sell Cairn. Assuming we have a sharp and sudden decline in the market now or later, an ideal entry opportunity is Rs 220-230 and something above that would be Rs 260

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