Infosys Q3 will give direction to market: Sudarshan Sukhani

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Infosys Q3 will give direction to market: Sudarshan Sukhani

Sudarshan Sukhani, s2analytics.com says, Infosys’ results will give direction to the market.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Sudarshan Sukhani See what other Experts & Brokerages are saying about Infosys See messages about Infosys Infosys BSE | NSE 29/05/12 Are Mutual Funds betting on Infosys? Other Stocks in this news DLF | Cummins India | ABG Shipyard | Dabur India | Jain Irrigation Systems | Asian Paints | Tata Consultancy Services |

Yesterday was a flat day for the Indian market. The Nifty closed flat, comfortably above the 4,850 level. The Sensex too ended very flat closing at 16,176 points.

Today is an important day for the markets. IT major Infosys will declare its quarterly results.

Sudarshan Sukhani, s2analytics.com says, Infosys' results will give direction to the market. "I would have assumed further consolidation except for the big event," he adds. 

According to him, the Nifty may test 4,950, if it crosses 4,900.

Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Sonia Shenoy. Also watch the accompanying videos.

Q: Do you see more upside from here?

A: I wouldn't because Infosys results will give us the direction. Yesterday, the market consolidated that was normal. I would have assumed further consolidation except for the big event. So, the big event will tell us whether we are going up higher or we are going to be choppy.

Q: Would you still be carrying on with your long positions on the Nifty or would you be taking profits around these levels, say 4,900 if we get there?

A: 4,900 is not a profit taking level. If we get to 4,900, we are certainly going to get to 4,950 also or even higher. So, there is no reason to take profits on the long positions that we are carrying. 

The stops for these positions are approximately 4,800, may not be a round figure, a couple of points up or down. That is the only risk these positions have that we can get stopped out for breakeven. The entry price will become the exit price, if today turns out to be a turning point on the downside. Otherwise, we will maintain the long positions. 

Q: What would be your call on DLF ?

A: Surprisingly, it is a buy. I think DLF is very bearish, it's going to go much further. At this point, real estate is going through a very interesting rally. We had Indiabulls Real Estate a buying opportunity that did well.

DLF is now poised for further gains. So, I think DLF for the short-term trader is a buy. We should not confuse position trading investments with short-term trading. Momentum is clearly in favour of the real estate stocks on the long side. DLF is a buy. I would also look at a target of Rs 200 approximately.

Q: You are buying Cummins as well this morning.

A: Yes. All the beaten down stocks, which are now beginning to rally, tell us that something is going on. Market breadth is improving day after day. Cummins has been a stark underperformer, but that underperformance maybe coming to an end atleast in the short-term.

Once these stocks start rallying because they are high beta, we also get significant gains if we can catch them. Cummins is just breaking out of a trading range. So, there is a long trade here. We just keep a very tight stop at Rs 360 and look for modest targets. If they are reached, you can keep a trailing stop.

Disclosure: I have no personal holding in the stocks discussed.