Correction below 5,200 likely; sell into rallies: Sukhani

“We are looking at downside pressure on prices on the index values, so the approach is to sell into rallies,” he said.

His advice to traders today is to maintain their short positions despite the choppiness in the market. “30-50 points up and down is possible, but that doesn’t change the mode of the market,” he said.

Below is an edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee.

Q: How would you approach the index this morning?

A: I would continue to assume that the market is in some kind of a correction. We are looking at downside pressure on prices on the index values, so the approach is to sell into rallies.

I have short positions and I am going to maintain them. After four-five days of choppiness and some declines, a rally could be expected in the sense that 30-50 points up and down is possible. But that doesn’t change the mode of the market, which is that a correction below 5,200 is very likely.

Q: You have a sell on Titan Industries ?

A: Titan has fallen to Rs 200 and then there was a rally and one thought that maybe this decline is over. But apparently for the last four-five days price action suggests that that was a relief rally; the decline in Titan is not done with and together with other fast moving consumer goods (FMCG) stocks Titan is now suggesting that a deeper correction is in the offing. The concept stocks are now going out of fashion, at least for the next few weeks. Titan is one of them and a target of Rs 200 is expected it. The day traders will expect something lower but even there a decent decline is possible.

Q: You are negative on JSW Steel ?

A: JSW Steel was in a bear market and then suddenly it started a rally without building a base without doing anything significant from Rs 550 to Rs 700. The stocks which do v-shaped rallies fall one day and then suddenly they start running up and that is a sign that this is being managed rather than a genuine uptrend. JSW Steel qualifies in that account. It’s at Rs 700. It is stalling and now it’s breaking down from minor patterns and that breakdown from minor patterns is probably an omen that it is going to go down further maybe even go back to Rs 570-600 level. This is a short sell, not just for a day but also for a position trader.