5300 first major support for Nifty; buy on dips: Sukhani

The market is expected to consolidate and the movement seen in past two days is just part of natural consolidation process, he added.

He sees 5,300 and 5,250 are two major support levels for the Nifty and suggests buying on dips. 

Below is the edited transcript of Sukhani’s interview with CNBC-TV18

Q: What is the view on the Nifty this morning?

A: The view on Nifty remains the same. I am assuming that we are in an uptrend and that assumption is fairly verified because we have been moving up steadily from 4,800. We are at five month highs. Market will consolidate, so movements that we saw yesterday and a day before are just part of natural consolidation process.

The trend is not disturbed by these movements. The trend is disturbed only if we start breaking support levels. 5,300 is the first minor support and then 5,250. We are still far away from those levels. My assumption is that we are in an uptrend. Yesterday any intraday buying did not make money, but that may not be repeated everyday. The view still remains buy on dips.

Q: Would your bets be to go more long on the Bank Nifty or you stick with the Nifty?

A: I would bet on the Bank Nifty. I assume yesterday was one of those random occurrences since everything was little subdued yesterday the Bank Nifty also went down. My view is that the Bank Nifty is likely to perform with the Nifty and the chances are that it will outperform in the next 15 days.

This view is not for today. It’s for the next two or three weeks. I would expect the Bank Nifty to do much better. That means that public sector undertaking (PSU) banks which were beaten down should now be picked up for buying.

Q: Any preferences in that list?

A: Broadly most PSU banks are now ripe for buying. We were looking at Andhra Bank and also Canara Bank .

Q: You like Dish TV India  in the midcap space?

A: We like Dish TV and it has come in our buy list repeatedly. Dish TV has done well in all fairness and it keeps on moving up. Dish TV is now on the verge of another breakout. Given the fact that market is fairly conducive to selected midcaps, Dish TV is one of those exalted midcaps, we will see much higher levels here. At this point of breakout we want to enter the trade today and see how it goes. Traders must remember that Monday is a holiday, so there is a certain amount of risk in carrying any trade.

Q: What about Biocon , do you have a buy on that one for today?

A: Yes, Biocon has completed a bear market and rallied from Rs 190-200 and that rally seems to be consistent. It is already 20% up and anything that is 20% up deserves attention. Biocon is now consolidating for the last one and half months.

We have a sense on the charts that this consolidation is coming to an end and we are buying prior to a breakout which is a nice place to be if this stock is going to go up. So Biocon is a buying opportunity, it is one of the better stocks in the midcap universe again like Dish TV this one should do much better.

Q: Any comment on Steel Authority of India (SAIL) and Sterlite Industries and the fact that they are going to exit the Nifty soon, how would you play these two stocks ahead of the exclusion?

A: For SAIL the exclusion is not surprising because SAIL is doing nothing. In terms of price damage it has been very bad, from Rs 250 a few years ago, it has come down to Rs 85-90. So SAIL is probably a very good idea to be excluded.

I am a little surprised on Sterlite Industries exclusion but maybe because of the merger and lot of other corporate events it is taken out, otherwise Sterlite is an excellent buying opportunity at current levels.

Q: Your comments on Manappuram Finance and IDFC . Any levels you are watching and what is the strategy, if any?

A: IDFC and Manappuram Finance have been tracked for sometime now and  SKS Microfinance is a late entrant. I think the bull market for Manappuram Finance is just starting. It has gone through some very bad patch and that is over rather than look at levels for Manappuram Finance the idea should be every dip here is a buying opportunity. It’s not in the F&O segment fortunately, so just have to pay cash to buy it which is always a good idea. But I would say it’s likely to do much better than we imagine.

We have some levels for IDFC. We have a pattern target of Rs 210 and that’s quite ambitious from the current levels and till that target is reached, I would be upbeat on it.