6350 within reach on Nifty, but gains to be slow: Sukhani

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With Indian equity benchmarks closing trade yesterday at all time highs, Sudarshan Sukhani of s2analytics.com tells CNBC-TV18 that the market is in a steady uptrend. "It seems reasonable to expect this market to go and touch 6350, the earlier high of the Nifty," he said.

However, he expects the market's movement from now to be more labored. "The easiest 1000 points has been already brought in, the next 800 points will be much more difficult," he explained.

Below is an edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.

Q: On the medium term, what kind of targets would you now set for the index?

A: The market is in an uptrend so we look for higher levels. It seems reasonable to expect that this market will go and touch 6350, the earlier highs of the Nifty, probably sooner than later. So that's the only target, but I don't think it is going to do that in a hurry.

The easiest 1000 points has been already brought in, the next 800 points will be much more difficult in the sense that they will be more labored, but that is a target that's within reach.

Also read: Left out of the rally? You can still bet on 3 sectors!

Q: Let's talk about the buys in your list today - Exide Industries ?

A: Exide has been on a roll after a bear market of its own. For the last three weeks it has been in a trading range. We have seen how stocks which are in trading ranges in the current uptrend breakout to give 10-15-20% rallies. I don't know whether Exide will do that because the market itself may become a little mild now, but it is right for an uptrend.

So we go and buy Exide, keep a stop loss and hope that like other momentum stocks this will also fly away.

Q: What about Bank of Baroda ?

A: Bank of Baroda is a more sober chart. It has been in a rally, then had a small correction but then had a repeat of that rally. Yesterday it saw new highs in this uptrend and new highs are generally bullish. But of course the Nifty also saw those new highs. Bank of Baroda is outperforming inside the bank index, so it seems reasonable that yesterday's up thrust will continue to have momentum.

Obviously there are all the usual caveats. If the market decides to go choppy or actually decides to fall today, then some of these stocks may or may not work out. But if the environment remains lets say indifferent, the Nifty remains around 5500-5520, then some stocks will go up and Bank of Baroda could be easily one of them.

Q: You have some heavyweight buys as well - L&T .

A: We have been talking about L&T even a couple of days ago. The trading range in L&T has an eminent breakout and that breakout occurred yesterday. It is quite fair to assume that this is probably not the end of this move.

If we see a correction in L&T, today or tomorrow depending on how the market behaves, that is a point at which traders will reenter the stock. Don't worry about the fact that it is lower than what it was yesterday. A correction in L&T represents a buying opportunity.

Q: What about HDFC ?

A: HDFC is a far better chart. Of all the buys that we have discussed for today, HDFC is the best in the sense that it is a chart that tells us that it is willing to go up even if the Nifty or the broad market were to be a little dull. So HDFC should be the focus.

What happened was HDFC did not participate in the rally at all for the last two-three weeks and that probably is going to see a reversion to the mean when HDFC does much better than the broader market. So this is a stock that we really want to go and buy now.

Q: Now to the sells in your list - let's start with Bharti .

A: Bharti is in for a big disappointment. When that 2G judgement came, there was this sense that Bharti is going to go above Rs 400-500 but the exact reverse has happened. Bharti has been a distinct underperformer in this market after that brief up move. Even now it seems on the verge of another breakdown. So Bharti is a short sell.

Any rally in Bharti should be sold into. It will take a lot of effort now for Bharti to regain those levels of Rs 400 plus.

Q: Cipla is a sell in your book too?

A: Cipla was a sell the day it started falling. It's a repeat sell probably because it is now on the verge of a breakdown below Rs 315. That takes it into a bear market territory. Now a stock that can actually enter a bear market in this uptrend is probably weaker than we can imagine, so Cipla remains a sell for today and it is also a sell on every rally.

Q: How you would trade Ashok Leyland today?

A: I would be buying it. Firstly, yesterday's big rally can see follow through today. Second, it's a non-index stock so even if the index falls it can do better. More importantly, Ashok Leyland is now on the verge of a 15 month breakout on the upside. So you want to take positions on stocks that are virtually giving a breakout now.