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Nov 25, 2011, 11.09 AM IST
Sudarshan Sukhani, technicaltrends.com says, 4,720 should act as support for the Nifty. “If 4.720 holds, the call is buy.”
Sudarshan Sukhani, technicaltrends.com says, the market will open with uncertainty. “I don’t have any strategy today,” he adds.
In an interview to CNBC-TV18, Sukhani says, 4,720 should act as support for the Nifty in the very short-term. “If 4.720 holds, the call is buy. That is the most appropriate trade, given the circumstance, the oversold nature of the market.”
Below is the edited transcript of his interview with CNBC-TV18 Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.
Q: What is your strategy on the Nifty today?
A: At this point, as a day trader I don’t have a strategy. Yesterday’s pullback was mainly because of F&O expiry. That seems to be justified. The market will open with a lot of uncertainty. I don’t have a strategy, that itself is a strategy.
Q: What signals are you looking for to lay on your next trade right now? Is it a breach below certain level or is it is rise above certain level for you to take a short-term long or short position?
A: In the very short-term, 4,720 should act as support. Today, if the Nifty opens weak and holds on to that support then the trade would be buy. So, it would be a long side trade. That is the most appropriate trade, given the circumstance, the oversold nature of the market.
The reason why I said there is no strategy as such is 4,720 should hold is a very subjective statement. The trader needs to understand if this level is holding. As soon as we break below it, if the momentum falls, if the sell side pressure reduces then we assume this level is holding. And then a long position becomes justified which is the strategy for today.
Q: You have been speaking about Pantaloon for a few days. Do you think the technical suggests that the stock could go higher?
A: Yes. Pantaloon is in a trading range. It went up and down, but inside that range. At Rs 201, which is where it closed yesterday, it was on the verge of a breakout. I am assuming that it will breakout above Rs 201 today.
If it breaks out then a breakout trade is justified. It has already moved up to 10% or 20%, can it go higher? The answer is yes. This is the point at which we should be buying. So, Pantaloon even on higher levels becomes a buy.
Q: Are you buying Hexaware from the IT space?
A: Yes. There is a reason for it. Unlike most other stocks, Hexaware is not in a bear market. It’s in a full-fledged bull market. It corrects a lot that’s okay because this is not a market where it will go up all the time. Now, it went through a very mild correction, while the Nifty was going below 4,700. That mild correction may well be over. For the last four-five days, it’s in a small trading range. So, after ten point dip, from Rs 91 to Rs 80, it’s inching upwards. Yesterday, it rallied fairly well. This is a buy on dip stock, in an ongoing uptrend, a perfect pullback retracement trade.
Q: What about Cummins ?
A: Cummins is not a buy on dip trade, it’s a falling knifes trade. It’s fallen so much. For the last five-six days, it’s falling. The declines have stopped. Now that means nothing because it can start falling again. It’s worth taking on the long side because it’s a blue chip.
Second, the first sign of revival came after five days of trading range. Yesterday, it crossed the five day range. So that could tell us if not anything, we can capture some part of relief rally. One of the advantages of buying blue chips is that you cannot go deeply wrong, you have a stop loss and there is liquidity and you can get out. Sometimes you can almost get in at the lows.
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