F&O expiry to be choppy, Nifty may dip to 5600: Sukhani

However, it may then rally back and perhaps again touch 5,700. The Nifty might end the day with the trading zone of 5,650-5,700, with this a breakdown will be postponed for another day, he added.

Below is the edited transcript of Sukhani’s interview with CNBC-TV18.

Q: Today it tends to be very unpredictable but you have been advising a no trade zone for a while, you see the same pan out today as well?

A: It is quite possible, that’s what the indications are. With this 50 point zone continues to persist. We could see the Nifty take a move on the downside towards 5600 because of the volatility that normally expiry day brings.

It may then rally back and perhaps again touch 5700, so these are intraday moves. It is quite likely that we will close right inside the trading zone 5650-5700 that means that a breakdown will likely be postpone for another day. There is no harm; markets will do this.

Q: Today there will be pressures and pulls of how positions are staked on expiry day but for a slightly longer run, for the next 3-4 days what is the sense you are getting in terms of how the Nifty will move? Does this kind of a long consolidation normally result in an upward break or a downward break?

A: Given the nature of the rally that we have just seen 400-500 points, this could easily result in a downward break. It doesn’t have to, but I would say the odds are almost equal. Had the rally been shallower, it would have certainly led to another up move, but this time it could bring us down to 5,600 or even 5,550.

Q: You have a buy on Hero Motors , take us through that one?

A: Whatever correction comes in it is just a correction. I do expect October to end higher than wherever we end today. Hero Motors is making a very decent bullish pattern; it is one of the better stocks in the universe among the blue-chips also. All stocks correct it is something I explained repeatedly and we saw a deep correction in this one also.

That correction seems to be over. A person looking for an opportunity, an intraday trade is available here on the long side and somebody who is willing to develop a long position here, I expect a breakout and eventually a crossover. Immediate targets are shallower but eventually something above Rs 2000.

Q: You have a buy on Ranbaxy as well. Do you think the stock has corrected enough and now it is good to buy it on a dip?

A: Absolutely and I also have to repeat that once a stock begins a correction we need to have some patience for the stock to develop and give us signs that the correction is done with. Ranbaxy is giving us those signs.

Now, it is anybody’s guess whether this works out or not. That is of course a question with every trade. But here we have seen a dip, we have seen the dips stop. That means the trend is clearly up. Now, there is a strong chance that Ranbaxy can resume its advance. So, all the odds are stacked in our favour.

In a choppy market, in a market that begins to move up, Ranbaxy in either case should do well. Unless the Nifty crashes, well of course all buy signals go void.

Disclosure: I have no holdings in the stocks discussed.