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Jul 12, 2012, 08.23 AM IST
Sudarshan Sukhani of s2analytics.com advises traders to remain cautious today, as he expects the market to be choppy.
Due to the lack of any positive cues this morning, indications are that Indian equities will start trade on a soft note. Because of this, Sudarshan Sukhani of s2analytics.com advises traders to remain cautious today, as he expects the market to be choppy.
In an interview to CNBC-TV18, he says an ideal time to buy would be if the Nifty decisively break the 5,350-5,350 level. “Also buy if Nifty comes close to 5,280, but that may or may not happen,” he said.
Sukhani sees the Nifty locked in a tight 70 point range today, and therefore does not advice going in for short term trades. “People who have build-up positions should hold on to it, for them 5,250 is some kind of a stop loss,” he added.
Below is an edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.
Q: Indications are of a soft start this morning, but would you use that as an opportunity to buy into the market again?
A: Not really. Yesterday we had a good day and we closed all positions almost at the top because it was in the afternoon. The market is likely to remain choppy today. Ideally we want to buy if Nifty comes close to 5,280, but that may or may not happen. Also, if it decisively breaks out above 5,340-5,350, that will become a buy signal.
But as of now, the SGX suggests we are going to be locked in a 70 point range and so there is no purpose in going in for a short-term trade. People who have build-up positions should hold on to it, for them 5,250 is some kind of a stop loss.
Q: You are positioning yourself on the short side in Wipro ?
A: Wipro has a disappointing chart and this stock is going to go down and go through a correction, no matter what it does in earnings. It remains a short sell and one has seen how IT stocks have distinctly underperformed and they are now on the verge of breakdowns. So IT is likely to remain an underperformer and a short sell. The second option is to sell CNX IT. That should also payoff.
Q: You are seeing bullish signs on the chat of Crompton Greaves ?
A: We have been upbeat on Crompton Greaves after it started to build a base, completed what I think was is bear market. This probably completed it. Crompton Greaves has been in a trading range for the last seven-eight days. It’s on the verge of the breakout because markets may remain choppy today one do not know if that breakout will come this morning, afternoon or tomorrow but it should and once Crompton Greaves starts inching up there is a strong buy signal coming because the targets then becomes significantly higher. The modest day trading target is Rs 138 but the genuine targets will be much higher for a position trader.
Q: You are buying Reliance Communication ?
A: Yes, Reliance Communication is an excellent buying opportunity. It’s doing what Bharti Airtel did few days earlier. It’s come out of a three month base and a three month base is a decent base to be in and yesterday Reliance Communication broke out of that and that suggests that irrespective of the kind of corrections the Nifty will do Reliance Communication is likely to outperform. It’s always wise to stay with the outperformers and even case Idea Cellular and Bharti Airtel have done well. This is not only going to play catch-up but also do much better. So a dip in Reliance Communication is a buying opportunity today.
Q: You are not optimistic on Zee Entertainment ?
A: Zee has seen a good run and that seems to be over. The short-term charts pattern for the last five-six days suggests that at best one is going to see a correction on the downside and that correction should be tradable otherwise one tries to avoid correction. But in case of Zee the support levels are much lower so a target of Rs 135 or even lower is possible. The worst case scenario is that the upmove in Zee is over and it will go through a dip correction. It’s not a buy now in any case. It’s probably a short sell and a sell on rally.
Q: BGR Energy is also on your buy list today?
A: BGR Energy has made a bullish head and shoulder pattern. The chart is slightly clumsy. It’s rather volatile. It goes up and suddenly moves down on alternate days. But broadly the trend is up. Yesterday’s big gains should be built upon. It’s again on the verge of a breakout. Even if the Nifty were to correct I suspect that there will be a lot many stocks which can be traded on the upside while the correction is going on. So BGR is going to be one of them. It’s a buying opportunity today and certainly for position traders.
Q: You have a sell on Gujarat Fluorochemicals ?
A: It is a disappointing stock. It is in the Futures & Option (F&O) segment so one can sell it using futures. Gujarat Fluorochemicals was a darling of yesterday but since then it’s a complete disappointment. It’s fallen from Rs 550 to more than Rs 400, little above Rs 400 and it is threatening to breakdown from small support that it held on to and if that happens it is going to Rs 395 as a short-term move and probably much lower. There is something going on in the company and the market does not like it. It’s giving bearish signals consistently.
Tags: market, Nifty, Sensex, earnings season, Sudarshan Sukhani, s2analytics.com, Wipro, Crompton Greaves, Reliance Communication, Bharti Airtel, Zee, BGR Energy, Sintex industries, Voltas, PTC India
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