In an interview to CNBC-TV18 technical analyst, Sudarshan Sukhani, s2analytics.com shared his outlook on the market and stocks across various stocks. According to Sukhani, the downtrend in the market is likely to persistent, till Nifty reaches 5,500 or close by.
"The view is clear on the Nifty; we are moving down, intraday trading is going to be difficulty in this week anyway," he said in an interview to CNBC-TV18.
One can still go long today and tomorrow, but with small volume. "If it does not work, get stopped out quickly. We are moving down, intraday trading is going to be difficulty in this week anyway," he recommended.
Below is the verbatim transcript of Sukhani's interview with CNBC-TV18
Q: Very difficult day of trade yesterday, if you get a bit of a pullback this morning, how should a Nifty trader approach it?
A: The suggestion has been to have two different approaches. The trend is down. I think we have been reiterating that repeatedly. Have a positional view, keep positional trades on the short side and just keep them on even if there are sharp intraday or couple of days of rallies. The downtrend is likely to persistent, till we reach 5,500 or close by. That is a long way off. That is one part of it.
Intraday trades are very difficult in front of news, which is why the suggestion was try to go long and keep your volumes low. That has not worked out. However, consistency in this thought is there. We still want to go long today and tomorrow.
Keep very small volume. If it does not work, get stopped out quickly but going short in front of news on an intraday basis is not a good idea, in principle. The view is clear on the Nifty; we are moving down, intraday trading is going to be difficulty in this week anyway.
Q: On individual stocks you have got some comfort in going ahead with short sells like in Bank of India?
A: Yes, Bank of India has been falling like most public sector undertaking (PSU) banks and then it went into a small trading range. It is on the verge of cracking below it. A lot of PSU banks have turned around, completed their bull markets and have embarked on what promises to be a very deep decline. Bank of India is one of them, go short in it, do not expect big rewards in intraday trading, which is why stay with the best of the blue-chips if you want to go long. Everything else is a short; Bank of India certainly is for today.
Q: Your views on Raymond?
A: Raymond has been coming in the shortlist repeatedly; it does not stop at all. Now it is making new lows again for this downtrend. Therefore, a stock that suggests that it is willing to go lower than the broad market and going lower on and on is something that one should sell and there is a theme here. Century Textiles and Industries, Raymond, Bombay Dyeing and Manufacturing Company, all of them have suddenly collapsed. That was the collective theme when they were going up and collectively they are coming down.
Disclosure: I have no holdings in the stocks discussed.
Q: Safer to go long on a blue-chip like Hindustan Unilever (HUL)?
A: Yes not because it is going up, it is not but because it has come down to a strong support at the Rs 450-460 level. There is very strong support in HUL. It may or may not work out but if it does for a short-term trader and assuming that the Nifty is to be managed on the upside even for few points; HUL could be a very decent participant because technically it is unlikely to crack below this support in a hurry. Therefore, HUL is a buying opportunity for a short-term trader.
Q: There are still bits of cement that seem to be holding out and you are buying ACC this morning?
A: Yes, ACC is a very nice chart and we have been upbeat on cement. It has not gone up to the extent we would have liked but the important point is it is going up in a market that is falling clearly. That itself is outperformance and there is some money on the long side. After a big rally for the last four-five days ACC has been consolidating. It is a small flag and that flag could easily take it to the next leg of its rally. Who knows what the Budget may bring and that is just not technical of course.
Q: IT of course has been a clear outperformer and you are going with Wipro today?
A: Yes. We have been recycling, one day Infosys one day Wipro. It is working out because short-term trader get 1-1.5 percent gains, even 2 percent on an intraday basis and get some of it and not all of it.
Wipro is on the verge of a breakout. It has already covered all the ground it had lost on the back of news, results. It is now willing to go higher that is good news. IT by itself is making new highs. If at all one want to buy something, focus on IT.
Q: You have a bearish call on CESC?
A: CESC started falling; it is a very choppy chart. It fell on the back of news that it was taking over that company then it started a rally and then it suddenly started falling again with all the other midcaps. Now the last support at Rs 290 has been broken, CESC is promising major declines. Again an intermediate trade on the short side not just a day trade but for the short-term trader you get those small points in any case. Most midcaps are selling opportunities. I have been reiterating that for a long time now.