Don't trade Nifty until it breaks out: Sudarshan Sukhani

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Don't trade Nifty until it breaks out: Sudarshan Sukhani

In an interview to CNBC-TV18, Sudarshan Sukhani, s2analytics.com says, he wouldn't trade the Nifty till it breaks out. “I would patiently wait for a breakout,” 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 SAIL See messages about SAIL SAIL BSE | NSE 29/05/12 Are Mutual Funds betting on SAIL? Other Stocks in this news Indiabulls Real Estate | Alstom Projects | United Spirits | Dish TV | NCC | Mahindra Satyam | IVRCL | SKS Microfinance | Rashtriya Chemicals and Fertilisers | Yes Bank | Jain Irrigation Systems |

The Indian market has been range-bound over the last few sessions. Experts are keenly waiting for a breakout on the Nifty.

Yesterday was a volatile session on the Dalal Street. The Nifty dipped below the 4,700 mark during the day yesterday but managed to claw back to finally close flat at 4,743. The Sensex too closed at 15,814.

In an interview to CNBC-TV18, Sudarshan Sukhani, s2analytics.com says, he wouldn't trade the Nifty till it breaks out on the upside or on the downside.. "I would patiently wait for a breakout," he adds.

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

Q: We have been marking time for the Nifty. How would you trade it this morning?

A: I wouldn't trade it till it defines a breakout on the upside or on the downside. That's been the theme for the last two-three days. I think that's been sensible.

What's the Nifty doing? It is finding support, bouncing back, finding resistance, coming down and one of these days it's going to breakout. Then traders will get trapped. So, I prefer to wait patiently for that actual breakout.

Q: You are bullish on SAIL from a trading perspective this morning.

A: Yes, I am. I have been upbeat on SAIL for sometime now. My sense is that it's completing its bear market. Atleast it's ready for the significant upside.

SAIL has made, for technical traders, something that is called a bullish head and shoulder pattern. It has confirmed that. This pattern quite often begins a move that goes far more than expected.

SAIL is a buying opportunity. Assuming that markets remain even mildly steady today, I think SAIL should be one of the better stocks to go long in. I have a target of Rs 88. If it reaches Rs 88, the chances are it could go higher.

Q: You have also picked a real estate stock after a long time - Indiabulls Realty on the buy side.

A: It has somewhat similar patterns as SAIL, not as good and not as definitive. But the fact that a real estate stock is bottoming out, is building a base was interesting.

If this is a momentum driven market, atleast for a couple of days till the Nifty decides what to do, we could see a lot more activity in this smaller cap, midcap stocks.

Indiabulls Real Estate is probably one of the better charts in the real estate stocks. So, here is a buying opportunity. We are all talking of short term buying. I am not suggesting you go and make an investment in IB Real Estate, but a short term buy is justified.

A lot of these stocks have moved up quite rapidly. Take your stops, but I don't think you will be stopped out. Chances are you will make money on this.

Q: Some of the power based stories were also looking good yesterday and you are buying Alstom today.

A: Yes. Just to keep it in context APIL, Alstom was somewhere around Rs 1,000 and is now available for Rs 360-370. It was higher than Rs 1,000 also. So, a lot of deep corrections, bear markets have taken place in these stocks.

Not all power stocks are giving us charts which justify taking long positions, but APIL is an exception. So, APIL is a buying opportunity. I personally think that for an investor, it's probably a good investment opportunity also.

For the day trader, for the swing trader, APIL at current prices represents an entry point which could take you higher than the target. I have a target of Rs 360, but it could go more.