Apr 05, 2013, 11.22 AM | Source: CNBC-TV18
Technical analyst Sudarshan Sukhani of s2analytics.com advises against trading on the short side today.
Sudarshan Sukhani (more)
Technical Analyst, s2analytics.com | Capital Expertise: Equity - Technical
"For the day the market could easily be choppy, a gap down and then attempts to cover the gap and a lot of chaos could come around. So, today is probably not a good day to trade the Nifty," he said in an interview to CNBC-TV18.
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Below is the verbatim transcript of Sukhani's interview with CNBC-TV18.
Q: It is pointing to a start in the red, a bit of a gap down. How would you approach that as a Nifty trader?
A: The gap needs to be watched and not traded into. Our suggestion yesterday afternoon towards the close was to take profits on short positions and step aside. The market has given a lottery for the last two days and we had one when the market went up 100 points.
Therefore, this is as much as one can get as short-term trader. So, I would be suspect of taking a trade on the short side today. Our positional shorts are maintained, they were taken much higher, nothing has gone wrong in them and if the market does go down, the positional shorts will continue to maintain money. Traders must have some positional shorts with them. If they do not have it then any rally in the market should be used to build these short positions.
However, for the day, the market could easily be choppy, a gap down and then attempts to cover the gap and a lot of chaos could come around. So, today is probably not a good day to trade the Nifty.
Q: You are still bearish on Bata India . Do you think sub Rs 700 levels are coming?
A: Yes, they are coming. Bata has entered into a bear market. Many of the midcaps and largecaps charts copied and mimicked the Nifty; for three-four days these stocks went up and then the decline has started again. The small upmove is a bearish flag. Therefore, Bata also has made the same thing; a bearish flag, a sense that the downtrend has resumed and these small patterns are made midway in-between decline. There is a lot of pain ahead. I would be willing to maintain this position.
Q: Has something changed in Punj Lloyd because that seems to be even going up on down days for the market?
A: Yes. That certainly seems to be a suggestion. First, a big rally and this big rally in Punj Lloyd maintained itself and that is very unusual.
Punj Lloyd did not go back and gave up the gain. A small correction in Punj Lloyd stopped at Rs 50, which is a strong support level. Therefore, it is now outperforming and giving signs of relative strength. We would be buyers here. There is no question of selling it. The idea is if the market gives sign of an intraday life, Punj Lloyd becomes a buying opportunity.
Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed.