A surprise surge in late trade got the Nifty to cross over the 5,900 hump again. For the week, the Nifty and the Sensex ended strong.
However, the broader market outperformed the frontliners to end the week with over a percent-and-a-half. Retail and high beta stocks led the momentum.
The biggest event to watch for, next week, will be the fiscal cliff deadline on December 31, when USD 600 billion worth of automatic tax increases and spending cuts will hit the US economy. The House of Representatives will reconvene on Sunday evening in a last ditch effort to avert the fiscal crisis.
In an interview to CNBC-TV18, technical analyst Sudarshan Sukhani, s2analytics.com says traders should not miss sessions on Monday and Tuesday because he anticipates big moves either ways.
He further says since the Nifty has been in very narrow range, a slightest nudge on the upside could take it to 6,000 and probably even 6,100, 6,200. "If it is heading up and breaking out then traders must position themselves on the long side with as much volume as possible. January is seasonally a good month for the bulls," he states.
Below is the edited transcript of his interview on CNBC-TV18
Q: It was a surprise move on the upside that we saw on Friday, 5,960 has been the high for the year, and do you see that getting conquered any time soon?
A: The chances are almost equal. On Monday, we will know whether the Nifty is going up. This trading range can be resolved in either ways. I don't have a call on whether we are going up or down, and it is not necessary because the range is so narrow that a slightest nudge to the upside will break it and push it towards 6,000 and probably even 6,100, 6,200. January is seasonally a good month for the bulls.
So, we will let the market tell us, probably by Monday or Tuesday we will all know where the Nifty is heading. If it is heading up and breaking out then traders must position themselves on the long side with as much volume as possible.
Q: I don’t think any traders are going to be in a frame of mind to come to work on the December 31 and January 1, but if you had to dish out some ideas for next week, what would they be?
A: I anticipate big moves coming in the market maybe on December 31 itself, if not then on January 1. So, traders should not miss.
Most of the trades that we are now locating for the next week are on the long side. It is important to understand that there is a sense that this market could actually breakout, but we will see what happens.
For the next week, I would recommend Gitanjali Gems. It is part of the group that has done well and seen an IPO. Post IPO most of the stocks in that sector will go up, which is what, is happening with Gitanjali as well.
The stock saw a brief retracement and after that retracement it has renewed its upmove. It is quite possible that this leg we are seeing will be the final, the grand finale of its uptrend but that could be something bubble like. So here is a stock we want to buy next week and consider this for buying
The second stock is NMDC, we saw the IPO for NMDC, a significant price drop and then a strong support coming in. This is sometime long time investors should be considering. When a stock goes up, it starts and then moves higher so that starting has already happened for NMDC. Next week we would see significant gains accruing in continuation of an uptrend. So both Gitanjali and NMDC are buying opportunities
The third stock is Hero MotoCorp, which has been a favourite. It is in a corrective mode, after a correction this stock is now going up, it went up to Rs 1,868-1,870, had a minor correction and then renewed its upmove. So we have quality here and the auto sector has been fairly cheerful. So we are looking and expecting the stock to touch Rs 2,200, although that could take time and it may not happen next week but the trend for the stock is up.
We also have one short sell. I suggest one should go short in IFCI. It has made a bearish head and shoulder pattern which tells us this stock is going down no matter what the Nifty does and no matter what the broad market does. Independently as well as a hedge, this is a stock we should be considering going short in.