Indian market has been losing ground and analysts feel that the downtrend will continue for a while.Sudarshan Sukhani of s2analytics.com warns that the next week may actually see a free fall because there is no technical support anywhere till 5400. He advises not to 'try to buy and catch falling knife but step aside or remain short'.
Q: The trading sentiment was clearly very weak on Friday. Overall for the week, we lost about 2%. How would you approach the Nifty next week?
A: The trading sentiment turned distinctly weak on Diwali day. On Thursday and Friday the idea was to look at short positions and maintain either a call, put balance or just remain short. That’s the approach for next week. We don’t call the market. It is not easy to say that this is what will happen. What we know is this is happening and the trend will persist. The market is in a down trend.
The bigger worry is that there was a band of support between 5580 and 5630 - that band of support broke decisively on Friday. That tells us that there is nothing to hold the Nifty till 5400. So, it is quite possible that next week may actually see a free fall because there is no technical support anywhere till 5400. That is a cause for worry and while that may or may not happen the key here is - do not try to buy and catch falling knife, step aside or remain short.
Q: Which stocks would you want to buy in the following week?
A: The market has different undercurrent. We have a trend, a short term trend which is very clearly down and likely to go down further. But the long term trend is up, at least for the time being. There are a number of midcaps which could be very attractive buying opportunities if we see a market decline in the coming week. So, we are not looking at a day trade, we are looking at buying good stocks hopefully 5-7% or even little lower. Many good stocks are available.
The ones I am tracking, which are my favourites and where may be I have positions also - first of them is Manappuram Finance. I am quite fond of that stock. It has doubled itself. Stocks that become multi-baggers will have to double and then go further. So, Manappuram has gone through a deep correction. It’s a perfect time to buy. I will be better if you find it lower next week.
Second stock is SREI Infra. SREI Infra was recommended on Diwali. It was Rs 30, it is now Rs 35 luckily in three days. It is likely to move further up. If you find it lower don’t worry about the fact that it has fallen a rupee or two rupee, you are getting it that much at a lower price, at a fairer price.
Third stock is Balmer Lawrie. This is a stock that we hardly track, but this is stock going on in an uptrend and now on the verge of a breakout to new highs. New highs are bullish. All of these stocks could actually be lower but that should not be a cause for worry, it should be a cause for joy that you are getting it cheaper. You are not day trading anywhere in this.
Last of the stocks is Hathway Cables. Exactly the one that Mr Tulsian has had as his fourth pick, with same reason perhaps. It is making new highs. Go and buy the stock.
Q: Bharti was the biggest gainer last week. Do you have any trading idea on that stock?
A: In all fairness when it was Rs 270, I said it is giving bullish pattern, let’s go and buy it. It’s Rs 300. So, I have given a lot of ideas on Bharti and Idea, on both of them when they were running. Now at Rs 300 it is still a buy, but wait for those dips and consolidation. It has given a 10 percent run, its good for more, but now entry needs to be timed. A little better timing is required. Next weeks should give those dips.