May 06, 2013, 12.12 PM | Source: CNBC-TV18

Bulls seem to be losing control, sell Bank Nifty: Sukhani

In an interview to CNBC-TV18 technical analyst, Sudarshan Sukhani of shared his reading and outlook on the market.

In an interview to CNBC-TV18 technical analyst, Sudarshan Sukhani of shared his reading and outlook on the market.

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Below is the verbatim transcript of Sukhani's interview with CNBC-TV18.

Q: Give us a word on how you would approach the index this morning given the global context of how trade is shaping up?

A: Friday was a good day for the Bank Nifty forecast. We thought the Bank Nifty will eventually come down and it did. I am taking the Bank Nifty again because it is a major component of sentiment as well as the Nifty.

The Bank Nifty seems to be suggesting that the bulls are losing control. If that is so then the prospect of a sustained rally from this level in the Nifty is not available as of now. This week the markets should be choppy and we will find out probably that a trading range is developing already and where the market wants to go. Today's trading should be a little careful.

For the Bank Nifty, the trade is to go and sell at higher levels and that trade is intact. It seems that a trading range is likely to break down if not today then in the next few days for the banks.

For the Nifty, 5,950 is our level. Above 5,950 we become intraday buyers but that is all. My view is that markets are likely to be choppy. The trade is available on the CNX-IT that is bottoming out and perhaps traders should focus on that one.

Q: You have a lot of rate sensitives on your sell list today. So let us start with that, you have a sell call for Tata Motors for the day?

A: Yes, Tata Motors failed to cross that strong threshold of Rs 300. That is the first message that it is not able to cross a resistance level that it has marked for itself. If that is so then the rally was just a rally in an ongoing choppy market. From Rs 300, it is quite easy for Tata Motors to come all the way down to Rs 240-250 eventually of course not immediately.

Friday's price action, significant weakness and a breakdown of a small trading range on the downside, all of it tells us that the upside resistance is intact and the stock is likely to find support at lower levels as I explained.

So, it is a short selling idea and it probably applies to most other auto stocks except from Maruti Suzuki India .
Q: DLF has been falling for the last one week, you see more downside there?

A: Yes, I think so. DLF is now at a make or break level. It is at Rs 230. It has fallen from Rs 275 to Rs 230 where significant support comes. Today that support may hold. If that support breaks then there is a big move on the downside here. It is not just for DLF then, it is probably going to be applicable to most other real estate stocks. We are tracking DLF for the day because that tipping point is available here. So, if DLF is trading below Rs 230, take a short trade, the chances are that not only will it work out for the day, it will also work out for a few more days.

Disclosures: I do not have holdings in the stocks discussed.

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