Short Ranbaxy, Divis Lab: Sukhani

Sukhani told CNBC-TV18, "Ranbaxy’s charts which were extremely upbeat and bullish have suddenly turned around and it’s making a distribution in the Rs 480-530 area and that distribution now seems to be getting confirmed and prices are working on the downside. It is willing to break Rs 470-475 strong support line. I think it’s just a matter of chance and it’s not correlated with the index also. So the Nifty could go up and Ranbaxy could go down. Now Ranbaxy becomes a short sell. Traders should avoid Ranbaxy. There is money on the downside for day traders, professional traders."

He further added, "Divis Laboratories had a remarkable rally but for the last one month it’s stalling at Rs 900-950 area and the first signs of exertion are coming in this rally. A strong uptrend can lead to a significant correction. It doesn’t have to be a bear market but traders can take advantage of the downside. The downside is enough to be tradable. So Divis Laboratories is now giving a sign of distribution. The first sign of crack was available yesterday. If one gets it right then one is selling almost at the highs and that has its own benefits. So Divis Lab with a tight stop loss is a short sell."

Disclosure: I have no personal holdings in the stocks discussed.