Current rally may not sustain for long: Sudarshan Sukhani

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Current rally may not sustain for long: Sudarshan Sukhani

The market closed last week with a flourish. The Nifty ended above the 5,300 mark. Sudarshan Sukhani, s2analytics.com says, the market has rallied decently. “I don’t think the rally will sustain for long,” he adds.

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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 Educomp Sol See messages about Educomp Sol Educomp Sol BSE | NSE 23/05/12 Are Mutual Funds betting on Educomp Sol? Other Stocks in this news BEML | HDFC Bank | VIP Industries | Biocon | Alstom Projects | Bharti Airtel | Power Finance Corporation | ICICI Bank | Reliance Industries | DLF | Indiabulls Real Estate | Ashok Leyland |

The market closed last week with a flourish. The Nifty ended above the 5,300 mark. Sudarshan Sukhani, s2analytics.com says, the market has rallied decently. "I don't think the rally will sustain for long," he adds.

According to him, sheer momentum can take the Nifty above 5,400 mark.

Also read: Global market rally continues; 5400 on cards for Nifty today

Below is the edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee of CNBC-TV18. Also watch the accompanying videos.

Q: All eyes seem to be on the 5,400 mark today. As a Nifty trader, how would you approach the index?

A: I would now ignore 5,400 level. Sheer momentum can bring about a crossover. That would not be significant in the sense that a level has been crossed. This momentum can do anything. So, 5,400 is not important. Much more important is what the market does in the next few days. We have had a very decent rally, a record breaking rally. It's not likely that this is going to sustain for long.

Q: Let's talk about the buys in your list today. What is your view on Educomp ?

A: The markets are doing remarkable things. Educomp has made a trading range and broken out of it. Once a stock breaks out of a trading range, it moves much further, especially when the market is giving it a push. So, Educomp is a momentum buying opportunity. I do not think investors should look at it at current levels or at current patterns. But for traders it is probably going to give very good returns.

Q: You have got a buy on BEML today.

A: BEML has an excellent chart. It was in a trading range for 15 days. At Rs 540, it is pushing towards new highs, a new high for this leg of the uptrend. It should be successful. If it is then we have a breakout from a trading range. So, BEML is not only a day trading buy, it is also a position trading opportunity. You have to have slightly wider stops, when to take a position, but the prospects of good gains exist.

Q: You are buying one of the bigger banks as well - HDFC Bank .

A: Yes. HDFC Bank has done what we hope the Nifty will do today or tomorrow. It has already crossed its bull market highs, the current uptrend highs, equivalent to 5,400. It is already trading at new highs for this uptrend. That's good news. That tells us that there is more momentum. Friday's momentum should be sustained because if the Nifty is going to go up, these heavyweights are going to participate in it. So, all said and done, new highs should be bought into.

Q: The only sell on your list is VIP .

A: That's fair because VIP has disappointed in terms of the rally we have seen. It was a relief rally, that's almost clear. It fell from Rs 185 to Rs 70. The rally in terms of percentage has been significant, but even now it's at Rs 110. It is far away from Rs 185. That Rs 185 is equivalent to 5,400 on the Nifty. So, VIP is now turning around. It is probably a sell, even if the Nifty were to go up.

Q: What about Biocon ?

A: Biocon has a good chart. It has been in a trading range, fell from Rs 350. All stocks did that, but it has not rallied. That doesn't mean it is not ready for a rally. It was in a trading range. When there is a decline, that decline leads to a trading range, that range is usually accumulation. So, I am assuming that Biocon is under accumulation at Rs 260-270. If you buy now, you can also get advantage of an eminent breakout and ofcourse the final push on the upside. So, at current level, Biocon is a day trading buy. It is also a position trading buy.