SENSEX NIFTY
Jul 12, 2012, 08.23 AM IST | Source: CNBC-TV18

Close long positions if Nifty ends below 5300: Sukhani

Technical analyst Sudarshan Sukhani, s2analytics.com told CNBC-TV18 that after yesterday’s breakout Nifty should have been pushing towards 5,400, but the close was little disappointing and it gave up 15-20 points of gains.

Technical analyst Sudarshan Sukhani, s2analytics.com told CNBC-TV18 that after yesterday’s breakout Nifty should have been pushing towards 5,400, but the close was little disappointing and it gave up 15-20 points of gains.

So, he expects the market to start on a lower note today. 

“The trade is still on the long side, but now our stops have been raised to 5,300, any close below that and the long positions will be completely shutoff,” he suggested.

Below is the edited transcript of Sukhani's interview with CNBC-TV18. Also watch the accompanying video.

Q: Still looking like a range bound market or do you think after yesterday’s close we are pushing to make some kind of a move on the upside even in the near term?

A: We should have done that which means after yesterday’s breakout we should have been pushing towards 5,400 but the close yesterday was little disappointing. We gave up 15-20 points of gains.

Today, the chances are that we will at least open lower. So eventually there will be one final breakout that doesn’t work out and it’s the beginning of the correction. I do not know if this is the one, but I would not be very upbeat or bullish on this.

The way to manage it is by keeping volumes under control. The trade is still on the long side, but now our stops have been raised to 5,300. On any close below that and the long positions will be completely shutoff.

Q: Do you expect more pressure on ONGC this morning?

A: Yes, I would think so because ONGC after a spectacular rally entered into a resistance zone at Rs 290, which is the zone where it has retreated repeatedly. It’s just a matter of chance that that was also the point when crude started rallying. I think ONGC would have retreated either ways. But with the news against it and with the resistance level which is very visible ONGC should now go through a deep correction. Here is a short sell and even if the Nifty were to be choppy this one comes down.

Q: What about Orchid Chemicals and Pharmaceuticals . It has been on an uptrend for the last 10-15 days now?

A: It has been. One must remember that it fell from Rs 250 to Rs 108. So the uptrend has started after the Rs 108 decline and that was a spectacular decline. But its not just last 10-15 days, Orchid Chemicals is now making some kind of a base for the last one-and-a-half months; it’s falling, rising and having a very decent rally from Rs 108 to Rs 125 or so.

There is a possibility that this stock is bottoming out. If that is so then yesterday’s gains should be built upon and it’s a buying opportunity for position traders where one is buying at the lows. So for either of them, day trading maybe one will see follow-through today, for position traders - buy it, hold it patiently and if this is a base, if this is a bottom then one is getting at very low.  

Q: You have picked Dena Bank today?

A: Dena Bank crossed Rs 100. It is now at Rs 102, which is a good place to be in. It is at new highs. Dena Bank should be an outperformer among public sector undertaking (PSU) banks which means PSU banks should be an outperformers in the banking and in the overall market so it’s one of the better stock to be in. If one is having money and inclination then buy it and hold and short-term traders should take only one side of the trade and that is to go long in it. 

Q: Century Textiles and Industries is also a buy?

A: Yes it is. Century Textiles has built a base. It made a double bottom. It came out of it. It was in our buy list earlier and that is persisting. The pattern suggests that there is much more upside here probably some kind of a bear market in Century is done with and a new uptrend is starting, which means the uptrend could be very young, one could see much higher levels here. The target of Rs 335 for a day trader or a swing trader but it will eventually reach Rs 400. 

Q: You expect more from LIC Housing Finance ?

A: If the Nifty decides to move up again LIC Housing Finance will outperform. We had this in our buy list. There is a significant resistance at Rs 275 and if this resistance is crossed then it’s in uncharted territory and that is a good place for a stock to be in if one is bullish. So the chance is to take the trade, if it moves up one will get bigger move and if it doesn’t one will still get few rupees

Q: You have a sell on Adani Ports and Special Economic Zone for this morning?

A: Adani Ports has been an underperformer. One has seen decent rally for the last few days and it stalled at Rs 125 level which has been a big resistance for it. Just as one is taking chance on LIC Housing assuming it breaks out then one will make big money. If this is resistance for Adani Ports then its going to retreat at least 10-15 points from here and that is a good decline for a short selling trader. Adani Ports has a tight stop loss. If it goes up then one should get out of it immediately and if it doesn’t then it’s going to come back quite a lot.

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