In an interview to CNBC-TV18, technical analyst, Sudarshan Sukhani, s2analytics.com shared reading and outlook on the market. He suggested to stay long on Nifty with tight stop losses of 6,130 for day traders, intraday traders and 6,000 for position traders.
Below is the verbatim transcript of Sukhani's interview with CNBC-TV18.
Q: How would you call the day's trade?
A: The market is in fine shape. We have seen the Nifty cross its earlier 2013 highs, make multiple month highs. So, new highs are bullish. But the problem with our market is the relentless drive we have seen from sub 5,500 to almost 6,200. That is roughly 700 points. This is not sustainable. Therefore, I would be a buyer; I would be staying on the long side of the Nifty with tight stop losses. Our trade is to take tight stop loss rather than to predict targets for the Nifty.
My stop losses for Nifty are 6,130 for day traders, intraday traders and for position traders it is 6,000. So far as 6,130 remain, short-term traders should be on the long side and the same applies to position traders. However, broadly stay on the long side till these levels are not broken and I am not predicting where it can go.
Q: You have Anant Raj on your buy list today?
A: Yes. Real estate stocks are on a roll and Anand Raj seems to be ready for a big move. It has two bullish patterns. Double bottoms, which got confirmed yesterday and while the double bottom was getting confirmed the stock made a trading range for few days which it broke out from. All in all there was a lot of compression, a lot of buying interest was being generated and that breakout has occurred. Therefore, this breakout is likely to see the stock much higher. One has to buy it in the cash segment. It is worth taking a trade on.
Q: You have a buy on Jaiprakash Power Ventures as well?
A: A bull market does strange things to stocks and Jaiprakash Power Ventures is a case where buying is now suggested. It was languishing, it was in a bear market of its own and then it started building a base and that base has come out as a bullish head and shoulder pattern, suggests that the bear market is over and a bull market is starting. It is broken out of that pattern and today one could see a lot of follow-through because its sister company has done well. Therefore, Jaiprakash Power is a buying opportunity, breaking out from a bullish pattern with strong momentum.
Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed.
Q: You have a short call on NMDC today?
A: Short ideas are difficult to get by but certainly some stocks will not be performing well and NMDC is one of them. It has been a big disappoint. It was in the trading range of Rs 125-135 area and it has broken down from that range. So, while all stocks are going up, midcaps are performing well, NMDC has done exact opposite. Assuming the market turns choppy, NMDC will be a selling opportunity and even other wise it is likely to be a distinct underperformer with low risk if one sell it. Therefore, a range breakdown in NMDC suggests this is a short selling candidate.
Q: You have picked Power Finance Corporation (PFC) from the financial basket?
A: Yes, financials are now doing the right things and which is why PFC is on my list. A trading range in PFC and a decent breakout yesterday suggests that this breakout is the beginning of bigger things to come. It does appear that the stock has bottomed out. That bottoming out process takes time which is why it was choppy and not giving any indications. However, now momentum should build up. Yesterday's breakout should see follow-through today and maybe even next week. Targets are much higher. We have modest targets for day trade. Buy PFC. It looks very attractive as a buying opportunity.
Q: You have Titan Industries in your sell list?
A: Titan has been in my sell list earlier also. It is an underperformer. It has now reached a level of Rs 290 from which it has now retreated and Rs 290 is proving out to be very strong resistance for it. Therefore, I would be a short seller in Titan. Keep a tight stop loss because in a bull market anything can happen. However, within those constraints sell Titan and expect lower levels.
Q: You have a buy on Ultratech Cement?
A Yes, it is one of the better charts. Ultratech Cement has been in our buy list consistently earlier also. It is going up in a steady step by step pattern, higher highs then it makes a low and then it makes higher highs. And now, for the last few days it is in a trading range. Inside that range it has made handsome gains yesterday. Today I would expect a range breakout and strong momentum on the upside. Here is a stock that is doing wonderful things, stay with it and go long today. If it works out then one can even carry forward the position for next week.
Q: How would you approach trade today on the Bank Nifty?
A: The Bank Nifty has been outperforming so far. However, this outperformance is not likely to be sustained. My sense is that the Bank Nifty will take the laid back as non bank stock start moving up. That includes oil and gas stocks, IT as well as pharmaceuticals, everything except the banks. So, as with the Nifty, we will stay with the momentum of Bank Nifty. Our stops for the Bank Nifty are 12,500 whether one is a trader or a position investor. Till then follow the momentum.
Q: How would you trade Jaiprakash Associates after yesterday’s big move?
A: We buy JP Associates. I do not think there is any confusion. The stock has built a base, broken out of it, doing the right things for a bullish trend. However, JP Associates is a buying opportunity even today. The stock could easily build on yesterday’s gains. As usual, keep a stop loss because one never knows what the market would do. But the trade is to be a buyer here.
Q: Your views on IDFC?
A: IDFC has been a favorite chart for me. I have been consistently suggesting it and that suggestion remains. The uptrend is clear and visible and gains should come. See the market context before taking these trades, but assuming that they are open and the market remain cheerful, IDFC is looking at higher levels and buying can be done easily.
Q: How would you trade Lupin technically?
A: Stocks that make lifetime highs have to be bought and Lupin is doing that. I do not see any confusion. One must be a buyer. Look for intraday dips and small consolidation. Go long as an intraday trader. These trades should make money; small or large. However, the trend is visibly up. So, it is a buy.
Q: How would you trade Tata Motors?
A: Tata Motors is a buy on the charts, but I will not buy it, which means that one can easily make it an avoid. The stock has been stalling at Rs 300 levels. It goes up a little, comes down a little. It’s underperforming the Nifty. I am not very upbeat on entire auto sector in any case. So, it is something that is easily avoided. If at all a trade needs to be taken then one has to be a buyer here.
Q: What do you do with IRB Infrastructure Developers, which has done well post its results?
A: Most stocks are buying opportunities and so is IRB. The stock has made bullish patter, head and shoulder, double bottom, you name it and it has made it. So perhaps it is putting behind the fundamental news and the effect of a lot of other information and willing to go higher. It is a buying opportunity. I would not buy it today. I would wait for a small correction and then enter. If the correction comes then take the courage to go long.