Be wise; Don't take a position in market today: Sukhani

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Be wise; Don't take a position in market today: Sukhani

Profit booking after a stellar performance in the last four weeks, has Sudarshan Sukhani of s2analytics telling CNBC-TV18’s viewers that today is one of those rare days when it is wise to not take a position.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Sudarshan Sukhani See what other Experts & Brokerages are saying about SBI See messages about SBI SBI BSE | NSE 23/05/12 Are Mutual Funds betting on SBI? Other Stocks in this news Infosys | Hindustan Unilever | Delta Corp | Jain Irrigation Systems | Jet Airways | Reliance Capital | ABG Shipyard | Rural Electrification Corporation | Bajaj Auto | Sun Pharmaceutical Industries | Ranbaxy Laboratories |

Indian equities witnessed its first serious correction since the start of 2012. The Nifty slipped 120 points to close below 5,100 erasing earlier gains.

Profit booking after a stellar performance in the last four weeks, has Sudarshan Sukhani of s2analytics telling CNBC-TV18's viewers that today is one of those rare days when it is wise to not take a position.

"There is no long opportunity because the market fell quite dramatically yesterday and we don't know how things will pan out today whether the gap up will sustain or will see a choppy day," says Sukhani.

He recommends a couple of largecap names like SBI and Infosys for investors who want to buy into the market today. He also analyses Delta Corp , Jain Irrigation , Jet Airways , Reliance Capital , ABG Shipyard , REC , Bajaj Auto , Sun Pharma , HUL and Ranbaxy .

Below is an edited transcript. Watch the accompanying video for more.

Q: How would you approach trade this morning given the fact that indications are of some damage control? Do you think there is still a long opportunity or has the market broken a lot of crucial supports in the near-term?

A: There is no opportunity today. There is no long opportunity because the market fell quite dramatically yesterday and we don't know how things will pan out today whether the gap up will sustain or will see a choppy day. On the downside this is not enough. One day's decline is not enough to justify short position.

A critical level of 5,050 holds very well so today is one of those rare days when it is wise to not take a position. If at all a trader wants to trade then he should trade the extremes. But as of now I have very neutral view on the Nifty.

Q: You have got a couple of buyouts on largecap names such as State Bank of India?

A: State Bank of India is one of the outperformers in the banking sector. After yesterday's mild correction, the stock is probably ripe for another upmove. If this was only a mild correction then banks would outperform because banks started correcting last week itself. SBI is probably an outperformer among the banks so in all senses whether we have a choppy market or whether we have a trending market on the upside State Bank today probably justifies a buy. It's also a buy for position traders.

Q: You have picked Infosys as well from the largecap basket?

A: The decline in Infosys post results has probably been completed, that was a steep decline. It was a good correction. Now it's finding strong support at Rs 2,500 and building a reasonable base. That base seems to be intact and in place. That's the same story with TCS, so I am upbeat on the largecap I-T stocks and decently upbeat on the midcaps.

I-T as a sector is likely to outperform in the short run. So Infosys is a buying opportunity. Even yesterday it did well and that should see a decent follow-through today. So Infosys is one of our best picks for today, trader should watch it in the morning and if you see a breakout in the first 15-20 minutes, don't wait longer, go and take a long position.

Q: Do you see more weakness on the charts of Hindustan Unilever ?

A: Yes and with some regret because that stock has done very well but now it seems that the correction we are seeing has not come to an end. Some mildly bearish patterns are being built there that suggest there is more downside. It's not just for today it's probably better to use HUL either as a short selling candidate or a step aside from the stock. There are no buying opportunities but in a choppy market HUL is probably a short sell with a decent downside. Look at Rs 370 as a target but I suspect it's slowly going to go lower.

Q: What about ABG Shipyard?

A: That is a stock that keeps on figuring in my sell list. It's doing nothing. It slides on some days then it stops then it again slides then small rallies and it slides again. There seems to be an intermediate top being built here and in any case the stock has rallied significantly, almost doubled itself so it's quite possible that this stop maybe the real thing and it could go against the market even if the market goes up. So ABG is now beginning to enter a bear market, it's a short sell; it's probably a short sell for position traders also.