Best to stay out till market decides on direction: Sukhani

He further adds that if the market crosses 5100, the momentum will continue on the upside. “But otherwise I am expecting choppy trade or some kind of decline,” he said.

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

Q: A call on the Nifty and how you would trade there?

A: I am apprehensive of taking long positions until the market decides that it wants to go up, so the approach is not to trade. This is not just till 11, but till the market takes a directional view.

If we cross 5,100, this momentum will go up and we will go with the market, but otherwise I am assuming either choppy trade or some kind of a decline.

Q: You think ICICI Bank is good in the banking pack?

A: It is because if this market goes up, the banks will lead and they will continue to lead. So to that extent, without knowing exactly what the RBI is going to do, it’s wise to stay with the banks.

ICICI Bank is an outperformer and momentum is very strong on the upside, so even prior to the event and after the event, if things are not depressing, this bank will outperform.

Q: We were talking about Exide the other day; you have got a buy this morning?

A: After having a very decent rally from sub-100 levels, it has now confirmed a large double bottom which means it went to Rs 99, went up, again went to Rs 99 and has crossed Rs 125 threshold. This is a major bullish pattern but it’s not going to run away in a day.

Yesterday’s breakout tells us that there is more upside in the short-term because a double bottom doesn’t just get fizzled out in a day. For the intermediate term, the targets are Rs 150-160, so position trader could take a position on the long side.

Q: Another buy idea is Asian Paints ?

A: Asian Paints is one of those concept stocks of yesteryear; six months ago it went through a very deep depression but that seems to be over. The first pattern that it has now given us is on the long side, a certain and confirmed bullish head and shoulder. That tells us that this is probably a basing pattern, a reversal pattern of the bear market that it went through.

We must take a long position with of Rs 3,000, but it could easily exceed that. It has been an excellent stock, an outperformer and it’s probably going in that area again. So this should be on the long side list of all traders.

Q: The other short is JSW Holdings ?

A: JSW Holdings has been a weak performer in the Jindal Steel group. There were others which did far better than it when the rally started, and for the last four days, it’s falling again. So the same story as Areva, in fact a little weaker, because the rally itself was very tepid, it was not as good as its peers and the declines are likely now to get certainly more momentum than the rally, so it’s a relatively safe short bet.

Q: You are buying Hindustan Unilever from trading perspective?

A: Hindustan Unilever has been a favourite. For the last three weeks it’s been in a trading range, so it’s reasonable to assume that a stock that went up from Rs 280 to Rs 420-425 and goes in a trading range will breakout again on the upside. We should never make the mistake that it’s going to go down. Hindustan Unilever did try to breakout yesterday but it didn’t quite succeed. I suspect that it’s ready for a big move again on the upside.

So here again day traders should focus on this with or without the event. Even an adverse reaction from the event will ensue that it could go up and positions should now be taken because it maybe ready for a new breakout.