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(Interview Transcript)
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However, for investors, he said the task is a bit more difficult. According to him, if investors want to risk buying at lows, there are some good buying opportunities. Markets can turn around but they are holding as of now, he said.
Excerpts from CNBC-TV18's exclusive interview with Sudarshan Sukhani:
Q: What is your feeling is this rally good for more than 5,000-5,100 on the Nifty or at some point would you start taking profits?
A: My feeling is that it is good for 5,000-5,100 on the Nifty but it is much more important to understand that the markets can do whatever they wish. They are still very volatile. So traders should not trade on the feelings alone; what is the evidence, the evidence is that the short-term trend is up and that is good news because now traders have a no brainer. They can simply understand, hey have to go with the trend which is up so do not buy today after a big huge rally, wait for an intra-day dip or wait for a two-three day dip that depends on the risk-profile of the trader and his risk appetite and then you buy.
Trading has become much easier because direction is clear, whether it will sustain or not is a matter of guess but I would assume it is sustaining. In any case the direction is you have to go long. For investors the task is a little more difficult should they wait for confirmation but that confirmation could come 500 points later or should they buy now and then find that this is a bear rally and they are again back with losses. There is no easy answer to that but I would say that if you want to buy at the lows you have to take the risk. So for people who are prepared to take the risk this is a good buying opportunity for investors also. But the markets can turn around; we do not know that as of now I think they are holding.
Q: Two stocks from yesterday, Yes Bank and JP Associates?
A:Yes Bank belongs to the banking category where I think some buying opportunities exist while the preference remains in PSU Banks there are opportunities across the sector; the sector has been badly battered. It is a question of selecting which bank you want to go into.
JP Associates has seen a very bad decline these rallies are going to come but we have to decide whether we want to go into the construction or infrastructure sector now. I would say it is best to stay away from this sector for the current period; it is best to stay away from the brokerages and the real estate also. So banks yes and JP Associates even momentum traders should stay away from it.
Q: Two more stocks for you, Infosys and Reliance Capital?
A: Reliance Capital did come down to Rs 1,000 support roughly so there is a buying opportunity there. It has fallen a lot and that entire ADA Group has some momentum buying opportunities. These are short-term trading opportunities but they exist.
Infosys is leading this whole pack and the rally and after yesterday we expect the stock to cool off a little but this stock is a buying opportunity again whenever there is a dip or a cool off. I think if this market sustains the upmove then Infosys should cross Rs 2,000. So for investors as well as for conservative traders it is an excellent stock to hold and go into.
Q: Two more stocks for you, Gujarat NRE Coke and IDFC?
A: Gujarat NRE Coke has followed the pattern of all those momentum stocks and on Monday there was a big sell off.. I think that was the capitulation and the stock itself is in a long-term uptrend that trend has not been disturbed. So for investors this is an excellent buying opportunity, you just buy and forget about it; for traders it is worth trading.
IDFC is an out performer in that group of IDBI, IFCI and the others. I would say first banks and then to some extent financial stocks are likely to see a rally. I do not know if you can invest in it but certainly you can trade in it.
Q: For slightly short-term traders who might be longs since yesterday or day before what is the first stop where they should consider booking out some profits?
A: I would think that this is a good time to book your profits without looking for stops but if you were to look at a stop then probably 4,800-a good 100 points down from where we are that is where a logical stop would come. But generally for short-term traders after a big thrusting move up or down in this case it was up, the time has come to take profits and step aside for a day or two and let the volatility, let this thrust cool off. That will be the time to reenter.
Q: If you had to pick bank stocks to buy now from a trading perspective can you single out one PSU bank and one private sector bank, which looks like the best charts?
A: Bank of India that would be from the PSU bank and private sector bank would be IndusInd Bank, which has shown relative strength in the recent days.
Q: What are you working with even in terms of a band for the Nifty in the next series?
A: I am assuming that the 4,500 support that held recently will be the lower end of this band or the lower end of wherever the Nifty could come down to. So far as it stays above 4,500, I am going by the assumption that the correction is over and we are back to our bull market however longer it takes to cross the earlier highs that’s a different issue.
So 4,500 on the lower side and there is really no upper band. Initially 5,100 is the resistance we are all talking about. The Nifty has to go up above that level to look at the next possible resistance that may or may not come about soon enough. I am looking at is to go long at opportunities and at dips, with a floor of 4,500.
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