SENSEX NIFTY
Dec 21, 2012, 12.49 PM IST | Source: CNBC-TV18

Don't trade Nifty; be stocks specific: Sudarshan Sukhani

According to Sudarshan Sukhani of s2analytics.com, the Nifty is no longer tradable. "We are just sloshing around in 70-point range. That’s no longer tradable. It's better to focus on independent individual stocks, wherever there is opportunity," he asserts.

The Indian market has been very volatile over this week. The Sensex closed at 19,453.92, down 22.08 points on Thursday. The Nifty closed at 5,916.40, down 13.20 points.

In an interview to CNBC-TV18, technical analyst Sudarshan Sukhani of s2analytics.com says the market is still in a trading range.

According to him, the Nifty is no longer tradable. "We are just sloshing around in 70-point range. That’s no longer tradable. We will wait for 5,850 to taken out and if that happens then that is certainly a shorting opportunity. Otherwise, it’s better to focus on independent individual stocks, wherever there is opportunity," he asserts.

Also read: Is investor optimism over Indian stocks out of whack?

Below is the edited transcript of his interview on CNBC-TV18

Q: We have got a slightly weak global set-up, would you look to short the Nifty, if you see signs of weakness?

A: Not really, because inspite of global set-up, inspite of the fact that Dow Futures at some time were 250 points lower, our market is still in a trading range. The SGX suggests that the Nifty will still remain within the boundaries of 5,850 and 5,920-5,930. So, we are where we are.

We are just sloshing around in 70-point range. That’s no longer tradable. We will wait for 5,850 to taken out and if that happens then that is certainly a shorting opportunity. Otherwise, it’s better to focus on independent individual stocks, wherever there is opportunity.

Q: Do you have Raymond on the sell side?

A: Raymond is a good short sell. We will get opportunities on the short side in a choppy market. Raymond has seen a very dramatic rally. That rally has topped out with a pattern that is a descending triangle. It is also giving a suggestion that a deep correction is in the offing. So, Raymond is something that is traded in the Futures segment, it is fairly active, liquid and one can sell it or even try to use Options there.

Q: Is Titan Industries also on your sell list?

A: Titan Industries was there in our sell list earlier as well. It is almost similar to Raymond, a small bearish pattern, at the top of a sharp rally. Titan is telling us that the bearish pattern was confirmed. We had sold it earlier and that sell continues. It is now giving us patterns that are continuing on the downside, so much lower levels are likely.

Q: You have an optimistic call on Havells India ?

A: Yes because Havells has already done its bit on the downside. It had a very severe correction. That severe correction is now leading to a consolidation, a breakout on the upside and higher highs-higher lows. It is a classic uptrend.

The market is choppy, so the rewards for long and short positions are uncertain but the trend is clear for Havells and it is on the upside. We want to go long in it. In a choppy market, whichever direction the stocks are taking, does give some leeway and maybe Havells will work out. The charts are very nice for the buyer.

Q: You have a short call on NTPC today?

A: NTPC was falling and then we saw a small rally for three-four-five days. That rally didn’t work out; it was a bearish flag in an ongoing downtrend. It has fallen down from that flag pattern. This suggests that the flag normally gets made halfway in a trend. It tells us much lower levels are likely in NTPC and that is not surprising because the charts are fairly weak.

Today, we are looking to go short in NTPC and if it works, if the close is lower than our short selling price, we will carry that position.

Q: Is DLF coming back on the buying radar?

A: It is because after a bounce back it consolidated and then it broke out on the upside over the consolidation. So the context needs to be understood. As long as the Nifty remains in that trading range, we will get buying opportunities.

The rally in real estate is not over. DLF is a buying opportunity on any dip or even if it sustains at current levels.

Q: Cipla is also a buy today?

A: Cipla has been a dream of a stock, we got in at Rs 330 and it has been moving up consistently. It has now made new highs for this upmove. It is a buying opportunity.

Pharmaceutical is an outperforming sector and likely to remain so. Cipla is a positional buy and not just a day trade or a swing trade. The chances are that higher levels are in the offing, so even if people are looking at buying equities, Cipla is a good idea.

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