Feb 29, 2012, 12.32 PM | Source: CNBC-TV18
Sudarshan Sukhani of s2analytics.com sees more upside for investors to play long today.
Sudarshan Sukhani (more)
Technical Analyst, s2analytics.com | Capital Expertise: Equity - Technical
Sudarshan Sukhani of s2analytics.com sees more upside for investors to play long today. He tells CNBC-TV18 that those who have long positions like him should maintain and keep them and those who donít may consider taking long positions.
ďThe volumes should be controlled now. We are already 100 points up, but yes, there is more upside,Ē he adds.
Below is an edited transcript of his interview. Watch the accompanying video for more.
Q: More buys in your list than sells today. What is your view on BGR Energy ?
A: BGR Energy had this tremendous rally like most other midcaps and then a sharp correction, but the correction was quite mild compared to the big rally that we saw. Yesterday, a very large gain tells us that the correction is over at least for now. A deeper correction will come at some later time, so donít get worried.
Yesterdayís big rally should see a follow through today thanks to global markets worldwide and also due to the fact that the correction was relatively shallow. So BGR Energy in my reckoning should eventually make new highs in the next few days for this bull market. Itís a buying opportunity and the only key here today is to wait patiently for some consolidation to enter. Donít rush in at the open.
Q: What about Havells ? Do you see upside there as well?
A: Yes. Itís a very good chart. Havells is one of the better charts in the F&O segment or even in the capital goods area. It has been moving up in a step-like basis. It goes up, corrects a bit and goes up again. So the current decline was essentially a correction in that ongoing uptrend and itís been a very smooth uptrend. That decline is over.
Once we assume that the correction is over, Havells should then make new highs as it has been making. So thatís a stock you want to not only day trade for today, but also probably hold on for a few days or a week or 10 days.
Q: Why are you cautious on a heavyweight like NTPC ?
A: NTPC has been a disappointment. Itís one of the few power stocks that has not done what they should have. The big rallies were missing and the last 15 days essentially saw a distribution in prices rather than accumulation. That level has now been broken. NTPC also fell yesterday which was unusual. It needs a lot of pessimism to do that. NTPC again is a sell even in a rising market. These short sells are not going to make big money; they cannot if the broad market is going up. But they are there. They are available as trades.
Q: What about Godrej Industries ?
A: It is an excellent stock. It was in a trading range for years and has finally emerged from that Rs 200 area and is now doing the right things. Itís already made new highs from this bull market yesterday. I would assume that there will be a lot of follow through here. Itís doing all the right things exactly at the point where Hindustan Unilever was when it broke Rs 300. The chances are the stock will eventually cross Rs 300, but for day traders today it is a good day to enter that stock.
Q: Your view on Asian Paints ?
A: Asian Paints is a dream. FMCG seems to be emerging as a theme and itís not necessary that it will always take a backseat in rallies. We have seen Godrej, we have seen ITC yesterday and Asian Paints too has broken out of a trading range. The correction in Asian Paints took the shape of a trading range. Yesterday it moved up. Itís now in the Rs 3,000-3,100 area. Once it crosses that hump, it goes into lifetime new highs.
I am assuming that given the nature of this market it will cross that. For today, we can expect a significant follow through. But a lot of these stocks will make money if people hold them because a lot of the day trading profits dissipate because there are gap ups. If you are going to trade Asian Paints, if you are lucky you will get a day trade but you will almost certainly get money if you hold onto it.
Q: If we do get 50-70 points in the first half of the day, would you want to take the profits of the last couple of days or would you let it ride for the afternoon or even tomorrow?
A: If we do get 50-70 points and assuming that even if itís 50 points, I would certainly be taking profits. That also means I would not be adding to my positions. We have had a very good run yesterday and so now the key here is for short-term traders to take money off the table. We can do that slowly which means we donít have to rush and sell everything at one go because all the gains will be coming in the gap. So now the view changes to slowly take profits, get some rest and see what tomorrow brings.
Q: No adventures short positions to be taken at this point today?
A: No, itís not a good idea at all. Firstly, we are not calling a top in the market. All we are doing is managing our trade effectively. The Nifty could easily go another 50 points after we begin the profit taking expedition. The second reason is the primary trend is up. Itís always wiser to stay with the primary trend.
Q: What kind of levels do you see on ONGC ?
A: I see ONGC crossing Rs 300 and eventually going all the way to Rs 330 or Rs 350. Now, thatís not a level for today, but thatís the trend in ONGC. Itís doing the right things - breaking out of a multi-year congestion. ONGC is probably a buying opportunity. For intraday traders go long in it whenever possible and for people who want to maintain hold positions it is an excellent idea.
Q: Between BHEL , L&T and Reliance Infra which one do you see the potential for most upside on?
A: That would be BHEL. BHEL because it is beaten down but it has also built a much larger base. BHEL will have the largest gains in terms of percentages than L&T and I wouldnít touch Reliance Infra at all. So I canít even compare it with the other two.
Q: Do you see strength in any of the metal charts between a TISCO, Hindalco or Sterlite?
A: Nothing at all. The only stock that could have and itís not now was Sesa Goa as it has collapsed. Sesa Goa needs to go down much lower before anything good can come out of it. I also believe that if we have a second round of correction and we will then metals will get battered very badly. So itís far better to avoid them because we can then be left holding those stocks if a sudden decline starts. So it is better to stay away.
Disclosure: I have no personal holding in any of the stocks discussed.