Buy at current levels; eyeing 5600 on Nifty: Sukhani

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Buy at current levels; eyeing 5600 on Nifty: Sukhani

The trade is to go long, says Sudarshan Sukhani of s2analytics.com, adding that he is not worried about the Nifty reaching 5600.

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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

The trade is to go long, says Sudarshan Sukhani of s2analytics.com. In an exclusive interview to CNBC-TV18, Sukhani advices traders to wait for a cooling period of 15 minutes after which they should look at buying in. "We are not worried about it opening with a gap up or touching 5600," he added.

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

Q: Looks like we may have a gap up start on our hands. How would you approach it as a Nifty trader? Good place to buy or too lofty levels for an intraday call?

A: It's a good place to buy. The key here is to wait for the first fifteen minutes and then buy because there is no rush in the first five or ten minutes, but the trade is to go long. We don't worry that it's going to gap up and that it's reaching 5,600.

Chances are that we are going to enter 30 or even 40 points higher that when we exited our trades day before yesterday, but I don't mind that. The position trades continue and sometimes these swing trades will cost us a few points to just take advantage of becoming a little low risk. But the trade is to go long, I am repeating that.

Q: Let's talk about your long list of buys starting with Axis Bank ?

A: Axis Bank made a narrow range yesterday. It closed better and is on the verge of a new up move. This is how momentum markets behave, so we are following the rules of momentum trading.

We don't say it's rallied so much so that it can't go up more, and the answer is it can at least now. So the chances are that Axis Bank, after a gap up, will maintain the momentum we saw day before. Yesterday's narrow range tells us that. These are essentially short-term trades now. I think viewers also understand it. But go with the flow, there is money in the market to be made.

Q: CESC also on your buy list.

A: CESC has a very attractive chart now. It had sharp rally after which it's been in a trading range for three weeks. It's on the verge of a breakout which is just for momentum traders.

The chances are that CESC can see a sustained uptrend which means positions can also be built in this stock.

Q: What about something like Grasim ? You see more strength for names like those?

A: Yes. Grasim came in our buy list just when it was breaking out above Rs 2,450. That was an extraordinary rally in Grasim, just once sided and very quick. It's again come in the buy list. It was in a trading range. It now appears that it's willing to go up. If that is so the trading range is a bullish flag. That tells us Grasim is moving towards Rs 3,100 or even higher. That's not the target for today, but again this is not just a momentum trade, it's also a position trade. We really need to stay with these positions till the rally lasts.

Q: All buys today, the other one is BEML .

A: Yesterday it rallied to new highs, so if BEML was in a trading range, that breakout has already occurred yesterday. New highs have to be bought into. It's in the right sector, capital goods because that sector has become so glamorous and there is a lot of headroom for BEML.

In the earlier bull market, it was in the much higher levels. So BEML has now suddenly become a momentum stock. You go and buy it, put a stop loss, the chances are that you will get those 10-15% rallies, if not today in a couple of days.

Q: From IT you have picked HCL Tech today.

A: Let's say it's relatively sober choice. HCL has been inching upwards and it's been underperforming TCS and Infosys. But yesterday it made new highs. We are talking about new highs for this bull market, this current run. The new highs tell us that there is significant momentum now.

HCL was in a compressed state, but once a stock moves out of a compression, there is a very big up move. HCL Tech is probably the best IT stock today.

Q: Finally Ranbaxy from pharmaceuticals.

A: Yes, Ranbaxy has rallied from Rs 380 to Rs 470-480. Now what we have seen in Ranbaxy is a small slide. That slide is taking the shape of a perfect flag. That tells us that Ranbaxy's final targets could easily be Rs 550 plus.

So Ranbaxy is again not just a day trade. Yesterday the stock saw gains and today we could see a significant breakout on the upside. It's also a position trade and it's a far better chart pattern than some of the other momentum stocks that we keep on discussing. So Ranbaxy works for both, positions and swing trading, day trading.