Hold on to longs; mildly bullish bias for today: Sukhani

He also says they should hold on to their long positions in the morning, and make a call only after a few hours have passed.

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

Q: How are you approaching trade this morning, back to a grind for the index?

A: Since the market has corrected for two days and we were at 5,270, we had some long positions yesterday. Those long positions are still valid. The market is going to open flat, so the idea is to have a mildly bullish bias for the day. We will see how it goes after we open for trade and go through the first few hours.

Q: You have a bullish bias on ICICI Bank ?

A: ICICI Bank has been an outperformer. Bank as a sector has done better than the other sectors, so ICICI Bank still has some more upside. Assuming that the markets are cheerful today, some of the banks will do much better than the others. The heavyweights are likely to do the best and ICICI Bank qualifies in that group.

Q: Educomp is back on your sell list?

A: Yes, it’s back on my sell list. The rally we saw was a relief rally and that is over. I think in choppy markets, one will see gains in the bluechips and losses in some of the weaker midcaps.  

Q: You have been cautious on Jubilant Foodworks which is a buy today?

A: Jubilant Foodworks went through a correction, so its not that the caution was completely unjustified but it’s bouncing back remarkably. I do not know how one can buy it for an investment but for trader, it seems that there is momentum here, it’s worth buying into. As I explained either concept stocks or bluechip stocks could do well today.    

Q: You think McLeod Russel has more upside?

A: I think it has lot more upside. It’s more of an investment stock; buy it on a dip. It is not necessarily a day trade but for traders it’s worth entering in now. It’s on the verge of making lifetime new highs. Stocks that make lifetime highs are very bullish and they must be a part of portfolio. Tea as a sector is going through a decent patch. So it’s in the right sector, right business and with right charts.   

Q: Do you think there is still more downside on BEML ’s charts?

A: It has more downside because when it started a small rally, we thought it was done with its bear market. But the rally was very tepid; when the Nifty went up 500 points, BEML went up only 30 points. That small relief rally is over and it has resumed its downtrend. It’s difficult to say how much lower it can go but one knows that it can go much lower. So BEML for today is a short sell, in fact, it’s a positional short sell. Sell it, put a stop and see where it goes.

Q: You have a buy on Dabur India ?

A: Fast moving consumer goods (FMCG) is giving big signals. Sometimes the signals are that it’s topping out but we have seen how ICICI Bank and Hindustan Unilever have both been resilient. They are not giving any signs of coming down except for small and minor corrections and that is now working well for Dabur. Dabur corrected a lot, so to that extent Dabur is now stronger, the correction is behind it. 

It appears that if this market again begins to move up, Dabur could be an outperformer, not just for today but for the next few weeks.  

Q: How do you approach things on the Index first?

A: The index will open flat and that is fairly confusing for a day trader. I would assume there is a mild bullish bias to the day. So the idea is to maintain the long positions that were taken and wait for the first one hour. If we see cracks after first one hour of trading then maybe we will get out of buying but otherwise, we will keep it and look to add. The market will tell us what it wants to do in the first 60-70 minutes.