Don't take new positions: Sudarshan Sukhani

In an interview to CNBC-TV18, Sudarshan Sukhani of s2analytics.com says, it is a difficult day for the market. "Bull case has been weakened by yesterday’s performance. Don't take new positions. If there are long positions, they should be maintained, if we close higher today," he adds.

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

Q: What is your strategy for today?

A: It is a difficult day today. Yesterday, we should have seen follow-through for a reversal that happened day before, but that didn’t come about. The market opened with a gap and then drifted down throughout the day. A 30-point rally is not a follow through. So, the bull case has been weakened by yesterday’s price performance. These things will happen, the market sometimes become so indecisive that it is difficult to make a call.

As of now, we are simply assuming that the minor uptrend is on and it could be sort of gaining steam. But today if we close lower than yesterday then we are nowhere. We are not in a downtrend; we are not in an uptrend. Again that 50-60 point range will be visible. So, the strategy is don’t take new positions. If there are long positions, they should be maintained, if we close higher today and brought down to zero, if we do not close higher than yesterday.

Q: What about Kotak Mahindra Bank ?

A: Kotak Mahindra Bank had a very good chart and it still has. Yesterday, the big decline in Kotak Mahindra Bank tells us that the uptrend for now has gone and given way to a correction. Some of the corrections that we are going to see are tradable in the sense that the declines are enough for traders to take a short position. That appears to be the case with Kotak Bank. So, in Kotak, I would assume that there will be further declines. It will be more on the downside, till it reaches some kind of a target, maybe Rs 560 and even lower than that.

Q: Do you think some of the high beta names like HDIL too are exhibiting downward trends?

A: Now they are. HDIL had a dream run on the upside, nice base, rallies, which were interrupted by some consolidations, that is over. Now, a minor distribution pattern is clearly visible. So, the decline in HDIL is not just a small one that will stop at current levels. There is more. The uptrend is going to be corrected with a fair amount of deepness. So, HDIL is a short sell for today and probably for the next few days.