Expect profitbooking at 5250; buy on dips: Sukhani

Below is the edited transcript of his interview to CNBC-TV18.

Q: How would you approach the Nifty?

A: We have long positions and that’s going to continue because the short-term momentum is on the upside and it make sense to go with it. Today we have a bit news event.

On my long positions I am considering taking profits in 5,250 area with the only exception is that if the market were to slice through that resistance and keep on going up because of some unexpectedly good news then that would be an exception otherwise we will exit at that target and then see the market behavior.  So, today is a bullish bias. Try to buy on dips.

Q: From FMCG basket, you are going with ITC today?

A: Yes and for two reasons; first, the momentum however weak or tepid is on the upside. Second ITC is on the verge of making lifetime new highs. It is at Rs 258. Once it crosses that it goes into unchartered territory. It is making a bullish pattern at these elevated levels. Although the valuations are high, the market likes it and the market is willing to push it much higher.

ITC is a buying opportunity and if it breaks to Rs 258, then it’s not just for day traders but position traders might like to buy Calls or buy Futures or buy equity here.

Q: How would you approach Ranbaxy Laboratories ?

A: Ranbaxy is a long idea. It is exactly the opposite of what ITC is doing. While ITC is on the verge of new highs what Ranbaxy did was that after repeated corrections it found support at the Rs 460-470 level and it is bouncing from that level. So maybe this is a deep correction that gets support at Rs 465 and if that is so, then a bounce can again take it to more than Rs 500. There is a certain amount of risk.

If we are right, we are buying at lows in the Ranbaxy today. We could see a nice follow-through today itself. If we are wrong we have a stop loss. But it seems that given market conditions Ranbaxy is probably ripe for a rally.

Q: Power Grid Corporation of India is in your buy list today?

A: Power Grid Corporation is a nice stock and has been moving steadily up. Although sometimes we find that these were good stocks to own only after they have done their bit. Yesterday we saw a sharp upsurge and that upsurge should take it higher. This is a stock that is making higher highs-higher lows, moving out from a base. I assume that the quality is good, so good pedigree. Yesterday’s gain should be build upon today and probably for the next few days.

Q: You would sell Tata Communications ?

A: Yes I would sell Tata Communications. For the last seven days, it has now being stalling; the rally has almost fizzled away. Whatever we saw from Rs 220 to Rs 270 has been done with and now it is sliding on the downside. Tata Communications has been a dismal stock to own for 15-20 years. So, once it sees a rally the best trade here is to go short. It usually comes down. It is a nice shorting idea.

Q: Do you remain cautious on the oil marketing names; do you think there is more downside here?

A: There seems to be more downside in oil marketing companies (OMCs), these stocks have gone in a range. They should have broken out, run up but that has not happened. In case of Hindustan Petroleum Corporation (HPCL) which is the stock idea for today but essentially it is applies to all three of them.

HPCL has now rallied it has now come in a minor down trend and it is quite possible that the minor downtrend could continue. There is some relation with Brent, with crude and with other news but the charts tell me there is downside here.