Buy, as trade's on long side today, says Sudarshan Sukhani

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Buy, as trade's on long side today, says Sudarshan Sukhani

Sudarshan Sukhani of s2analytics tells CNBC-TV18 that his strategy to on the Nifty today will be buying as trade is on the long side.

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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 JSW Steel See messages about JSW Steel JSW Steel BSE | NSE 29/05/12 Are Mutual Funds betting on JSW Steel? Other Stocks in this news Adani Ports and Special Economic Zone | DLF | Indiabulls Real Estate | Mcleod Russel (India) | GAIL India | Housing Development Finance Corporation | IVRCL | Reliance Capital | Jain Irrigation Systems | Sintex Industries | Oil and Natural Gas Corporation | Hathway Cable and Datacom |

Sudarshan Sukhani of s2analytics tells CNBC-TV18 that his strategy to on the Nifty today will be buying as trade is on the long side. 

Below is the edited transcript of the interview. Also watch the accompanying video.

Q: It looks like the market will have a shot at 5000. Would you trade towards strength for the market and say that this short term correction maybe behind us?

A: That's right. Yesterday was a short term correction and today morning we know that it was just short-term, one-day off. The markets are not prepared to stop or pause, and there is no reason for traders to go against the market. Today would be a day when buying is the appropriate strategy to take. If anybody took aggressive short positions yesterday then in the morning itself it would be advisable to close the short positions almost immediately. The trade is on the long side.

Q: Let's talk about the buys in your list. You have got JSW Steel there?

A: JSW Steel has been doing a spectacular rally from Rs 465 onwards and is relentless; it's not stopping. It's a stock that's given us very clear indications that its going up should be followed. It's come in my buy list repeatedly and I am here again as a buyer for JSW Steel. We don't know the final ultimate targets of this rally, what we know is that it dips, it pauses and it keeps going up. So JSW should be one of our best buys for today. Have a look at it at Rs 685-690. The more important part is that the trend is consistently up.

Q: What about Mundra Port which you are also bullish on?

A: Mundra Port made a three-day dip, which was essentially a correction in an on going uptrend. Good stocks correct for three-four days as the Nifty apparently corrected for just one day, so that correction is over. Then its original uptrend is likely to be resumed. It did do something good yesterday and we will see very decent follow through today on the upside because the markets are likely to be supportive. Mundra Port remains a buy. Have a target of Rs 142. While the environment is supporting long positions, traders must understand that every position should carry a stop loss with it.

Q: You are playing a couple of the high beta sectors as well like real estate; you are long on DLF today?

A: Yes, that's a surprise after being bearish on real estate for I don't know how many years. First, Indiabulls Realty came in my buy list and now DLF. DLF is making a bullish head-and-shoulder pattern, that's a surprise. That pattern suggests at least an intermediate term uptrend is likely. I don't know what's going on; a lot of these stocks are now making good patterns on the bullish side. We will see what happens but DLF is a buy. It's a buy not only for the day traders today when I expect a strong thrust on the upside, it's also buy for somebody who wants to carry positions till the Nifty does something wrong. It's appropriate for both kinds of traders.

Q: On your sell list though, you are short McLeod Russel today?

A: That's a stock that's been disappointing and simply because we want to either hedge or take a trade on the other side in weak stocks; it is one of the much weaker stocks in the F&O segment. But McLeod Russel has been consistently going down, breaking support levels and the rallies have been very mild and tepid. McLeod Russel is a short sell. I do think it will go much lower eventually, but at this point, Rs 175-170 is a downside target.

Q: You are not very bullish on GAIL 's chart either?

A: No because GAIL broke that Rs 425 levels; it shouldn't have. There is no reason apparently, but there is something going on in GAIL which tells us that this stock is coming down. It's fallen almost 10-15% from where it was. From a trading range, it has almost collapsed, so GAIL is a short sell. There are two messages here. First, please don't think this is a buy on dips or a falling knife straight. If traders can avoid buying short selling candidates, that itself gives them an edge. For those who want to take a short sell, GAIL is appropriate. In fact, if you have a small intraday rally, you can just go and sell it.

Q: And the large cap, HDFC on your buy list today?

A: HDFC has missed out. It's not done what it normally does. It leads the rally and then on the declines, it has shallow declines. But this time, it's very unusual. Yesterday the signs were that HDFC is now prepared to begin a breakout and move up. We will find out, but I think if the Nifty is going up, HDFC is likely to participate sooner or later. Charts suggests it will be sooner. So traders should also focus on HDFC today and once they find a breakout, they could use HDFC as a surrogate for the Nifty.