If market trend continues, we can cross 4800 fast: Sukhani

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See previous views by Sudarshan Sukhani See what other Experts & Brokerages are saying about IVRCL See messages about IVRCL IVRCL BSE | NSE 29/05/12 Are Mutual Funds betting on IVRCL? Other Stocks in this news Punj Lloyd | Mahindra and Mahindra | Delta Corp | Coal India |

In an interview to CNBC-TV18, Sudarshan Sukhani of s2analytics.com analyses the market performance. He also gives his outlook on select stocks.

Below is an edited transcript. Watch the accompanying video for more.

Q: How would you approach the Nifty today? Would you go long from these levels?

A: Traders who were listening to your channel in the morning should have gone long in the morning itself. That was the suggestion that we should go and buy. The first target of 4,720 I explained was within easy reach and the chances were that the Nifty will go and test 4,800. We have already crossed 4,720 and the chances are very strong that we will go and do a test of 4,800. At current levels clearly the profit potential is no longer the same as it was in the morning. But even now there is a possibility that we may cross 4,800 also. So buying is possible.

Q: For an intraday trader or even for the next couple of days is it a good idea to buy even at these levels given the fact that you think that 4,800 looks doable?

A: It seems so because this rally has started after a long period of consolidation and a fairly dismal picture. There is almost no buying currently in the market. Even the slightest buying can spark off an increasingly strong momentum on the upside. So at current levels it's still possible to go long. Now there are two instruments which can be used, first is Nifty futures and the second is 4,700 calls. Both are possibly good instruments to take this trade.

Q: Last week we saw some pretty sharp reversal. If you are trading long, how deep should stop losses be for traders right now?

A: That's easier to say. Our stocks for today's trade, those who are going to take long positions now or who have taken in the morning is 4,680. It's not deep. If this market turns around we want to get out almost immediately. We are going against the primary trend, so it is not as if we are prepared to give the market a lot of leeway. With a 4,680 stop we buy now, if this market continues and maintains today's momentum we will see 4,800 crossed fast enough.

Q: Coal India has been gaining for the second day in a row and is the top gainer on the Nifty again today, up around 5% odd. Tell us how you would approach that one?

A: See it's already done its bit. But it is possible that we can go and buy it now because it's a buy trade. But for many of these buy trades we must remember that once a stock has run up a lot it then goes into a process of consolidation and sometimes we buy just when it starts consolidating. So that risk is there now with Coal India. Somebody with a time horizon of a few days can buy it and look to Rs 340-350 as a potential target. Somebody who is looking for a day trade today may consider other options.

Q: Delta Corp is showing a bounce back after a really long time. Would you initiate a long in that?

A: Yes and the reason is I would initiate a long on most stocks today. Everything is bouncing up and that includes Delta Corp. When we are talking of a short-term trade today, tomorrow, couple of days, maybe three days at the most, then clearly we should wait on the long side and Delta Corp as a high beta stock justifies buying. We can look at a target of even Rs 64-65 in that.

Q: What do you see on the charts of something like M&M now?

A: I would avoid it or actually sell it. M&M has some very dismal chart pictures. It is breaking support levels repeatedly and is an underperformer. So either it's an avoid and there is no reason to go short on a day when the market has strong momentum. At the slightest faltering of this momentum M&M becomes a short signal and I suspect we will see Rs 640 and probably under Rs 600 eventually.

Q: On Punj Lloyd , what are the levels that you would be watching out on that one?

A: I would be buying it. Punj Lloyd is probably going through a very long-term bottoming out process. So rather than short sell it, the idea is to buy it at every dip on the accounts whenever there are buying setups. Today, we have an appropriate setup for buying Punj Lloyd for an initial target of Rs 44. It's going to take a lot of time as it develops a base and begins a new bull market. That is probably months away but in the short-term at least for the next few days which we are talking about now Punj Lloyd is a buy and it could exceed that target also.

Q: What is your view on IVRCL which is up around 5% odd?

A: See, everything is up around 5% odd so we shouldn't be surprised with that. But IVRCL has some very interesting patterns. It's been in a trading range for the last 10 days or so. It clumps down, finds support and then bounces back. That's giving it a consolidation pattern which is now on the verge of a breakout. It could breakout within the next one hour. So that 5% is probably not the end of its up move. If it breaks out and it should we are looking at much higher levels in IVRCL.

So it's a trade that can be carried for a few days now, not just for today. We should be looking at Rs 33 and then maybe Rs 36-37. These stocks are priced at much higher levels, so when I say Rs 37, I remember the earlier prices and I am amazed. But IVRCL has multiple patterns going in its favor, so I would say look at it and consider buying.

Disclosure: I do not have a personal holding in any of the stocks discussed.