SENSEX NIFTY
May 10, 2012, 10.58 AM IST | Source: CNBC-TV18

Don't trade Nifty today, suggests Sudarshan Sukhani

The Nifty stayed lower for the second consecutive session on Wednesday amid Greece concerns and depreciating rupee. It declined 25.15 points to end at 4,974 yesterday.

The Nifty stayed lower for the second consecutive session on Wednesday amid Greece concerns and depreciating rupee. It declined 25.15 points to end at 4,974 yesterday.

Sudarshan Sukhani of S2analytics.com expects the market to be choppy today. He feels that today’s rally is unlikely to be tradable. “It is for the market to decide if it can create a base for itself at 5,000 levels,” he said.

Today is not a good day to trade Nifty, Sukhani suggests.

Meanwhile he has a buy on Apollo Tyres , Ranbaxy , Asian Paints , IOC  and sell on ICICI Bank , Century Textiles , Hindustan Zinc , Hindalco , HDIL  and Hexaware .

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

Q: Two difficult days for the index. How do you approach it today? You play for a bit of a bounce back or do you think the call is still to go short?

A: The call is still to go short but not necessarily today. If we have positional trades just as I have a positional short position then that needs to be maintained because choppy markets are not a good reason to exit an intermediate trend. But it’s quite possible that this market will now decide whether it wants to build up base around 5000 or whether it will continue and renew its downtrend. We don’t know the answers. The probability lies in favour of a continued downtrend but we’ll have to find out.

So we could easily go through a period of choppiness and some rallies but today’s rallies are unlikely to be tradable on the upside. First the markets have to show that they are not going down any further and so for today, probably that is the only message that the market can give. It is not a good day for trading the Nifty.

Q: You still have got a conviction sell on ICICI Bank from the banking space?

A: Yes because it fell with a gap yesterday. Banks are still the weakest of all the indices, of all the sectors. Since it’s not necessary that this market will rally from the morning to the afternoon, so any weakness during the day is an ideal opportunity, for a day trade on the short side, in ICICI Bank. Like most other banks it’s now willing to crack much lower.

Q: Apollo Tyres is out with results today, you have got a buy out on that name?

A: Yes I have a buy. There is always a risk in buying stocks in anticipation but Apollo’s charts are upbeat. We saw a double top that broke down from Rs 92-93. It has gone and completed its targets. For the last 4-5 days Apollo is in a trading range and yesterday it did well. So I would assume that the market is anticipating pleasant results. But apart from the results, purely on the charts Apollo is a buying opportunity. You start with a day trade and if it works out then it needs to be converted into a positional long.

Q: Another one of your sell calls is Century Textiles?

A: Yes it’s been a very big disappointment. Like most other midcap stocks it made reversal patterns, broke down. But in case of Century Textiles that breakdown seems to be continuing. It’s now on the verge of another break of the support level. If that one breaks, I don’t know where it’s going to go down to. This is no longer a real estate play, it’s something else and it’s very bearish.

So Century Textiles today is a short sell. In fact in a choppy market or even if the markets rally we could sell into strength in Century Textiles and hope that things will work on the downside.

Q: Ranbaxy was strong yesterday and you think that could be a good long trade for this morning as well?

A: Yes, I think there will be a lot of follow through in Ranbaxy. It has been doing all the right things, the corrections are mild. Stocks that go up tend to go up. One of my favorites on this show has been Asian Paints,from Rs 3000 onwards, I have been thinking it could not go up further but it keeps on going up and I have to buy it.

I think Ranbaxy is also coming into that stage. So we want to go long in Ranbaxy in the open, wait for the first 5-10 minutes. If the stock price begins to move up don’t worry about it, just go long. It’s one of the better trades for the day.

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