Technical analyst Sudarshan Sukhani of s2analytics.com has a mildly bullish stance on Nifty and expects it to be in the trading range of 4,800-4,950 for the entire week. Within this trading range one should look to buy dips, he suggests.
Below is the edited transcript of Sukhani’s interview with CNBC-TV18. Also watch the accompanying video.
Q: What is the trading call for the Nifty at the start of this week?
A: I am mildly bullish. The Nifty is in a trading range so a trading range can go either ways and in fact it need not go anywhere. We can still remain in 4,800 and 4,950 for the entire week. That is a possibility. Within this trading range I would look to buy dips, which seems an easier trade to take including today.
So today there is a mild bullish bias. Unless something happens I expect this week to continue in the same fashion. It does appear that 4,700-4,800 support zone is fairly strong even if it is going to break it won’t do that so easily and it may not break at all.
Q: Exide is in your buy list today?
A: Exide has been in some kind of a bear market of its own, that seems to be getting over. On Friday we saw a sharp rally in Exide and that rally came on the back of a trading range that was continuing for almost three weeks. So there was a big decline, a trading range that trading range has proved to be accumulation. I think Exide now is going to see follow-through on the gains it saw on Friday and probably is turning around. We are seeing a reversal of trend in Exide and that’s interesting for bulls.
Q: You like the chart of LIC Housing Finance as well?
A: LIC Housing Finance is giving same pattern; after a minor decline, so the corrections were shallow and that tells us that the stock has lot of intrinsic strength technically. Then we had a trading range where the corrections ended. Now LIC Housing is on the verge of breaking out of the range. It hasn’t done so but internals inside the range suggests it’s a matter of time before it moves up. So it’s a good buy at this current level.
There is a modest target of Rs 250 but once Rs 250 is touched and after it is crossed we could see new highs. It’s something traders should be long in.
Q: You are selling HPCL this morning?
A: Yes, it is a little surprising why Hindustan Petrol’s charts are so different from BPCL. HPCL never really saw that handsome rally that BPCL went through maybe because of oil interests or whatever. Now it’s turning around. It has been in a consolidation, that consolidation seems to be breaking down. So this is one stock, at least for an intraday trade its worth looking and going short in. I don’t know about big position but for a couple of days it’s a shorting idea.
Q: How about something like Jet Airways?
A:Jet Airways is in a bear market. It does appear that the uptrend is over. But we saw a rally from Rs 280 to Rs 320-330 recently. That rally was probably an upward flag which is continuation of a downtrend. So a final visit to Rs 280 or even lower is possible in Jet, although that doesn’t have to come today because today, the targets are much more modest around Rs 300-302. But eventually even a break to Rs 280 and even a breakdown is possible.
Q: You have picked Sobha Developers from real estate space as a weak chart?
A: Yes it is relatively weak in two senses. Independently, it’s broken below Rs 300 and second, when we compare it to other real estate peers like DLF, Indiabulls Real Estate, it is underperforming. So Sobha Developers is a short-term sell, it is probably an intraday sell. Sell on rallies, wait patiently and cover in the evening. For intraday traders there some points to be made, not just today but for a number of days.
Q: DCB from banking space that is a buy today?
A: DCB is a buy. It has fallen from Rs 50 to Rs 38. At Rs 38, it started building a small base and now it is just breaking out of that base. So it does appear that DCB’s decline, the bear market which we saw in it is probably getting over. These are reversal pattern that suggests that a trend change is in the offing. If it works out there will be significantly bigger gains here. But here at this point we are looking at Rs 41- 42 and even that is good in terms of percentages.
Q: What kind of trading rally are you expecting, what kind of levels do you have in mind where would you be looking to book profits on any longs taken?
A: We start this week with long positions that were taken on Friday afternoon and the target for this leg of the rally is about 5050. The exact number is never known but if we are approaching that level that is the point at which we would plan to take profits.
Q: Technically what is your view on Crompton Greaves?
A: Technically it’s showing a dismal picture, I am not upbeat at all. It has been breaking down and even after results I don’t think the price movements will change. A double-digit target for this is quite likely eventually. So I would say it’s a short sell and in a rising market short selling is not easy but it would still be short sell.
Q: What are you thoughts on Voltas, the big start on Friday?
A: At this point its not enough, so we either wait it out or still remains a short sell at higher levels till it proves itself. The best thing is to stay away from it now.
Q: Technically how does Praj Industries look?
A: There is nothing in Praj, just one day of rally after 100 days of decline. It is still a short sell.
Q: Technically what about State Bank of India?
A: SBI is very good; I have been favouring this since its results. Even on dips I suggested a buy. It is looking at Rs 2250-2230 and even higher, so go long in it.
Q: How does Mahindra and Mahindra look?
A: I wouldn’t buy it although I am not sure if I want to sell it but it’s a short sell if at all we have to classify it.