Apr 30, 2012, 10.57 AM | Source: CNBC-TV18
Sudarshan Sukhani of S2analytics.com believes that the short term trend for the market is on the downside. So, he expects May series to end lower than it started.
Sudarshan Sukhani (more)
Technical Analyst, s2analytics.com | Capital Expertise: Equity - Technical
However, he holds a bullish bias for the market today. So, he expects to see some gains in Nifty and individual stocks.
Below is the edited transcript of the interview with CNBC-TV18's Mitali Mukherjee and Sonial Shenoy Also watch the accompanying video.
Q: How do you approach trade after the last weeks rather off colour performance both for the index and for stocks?
A: There are now two under currents in the market. The intermediate term trend is down. So, I assume that May series will end lower than where we started. For the short term, for today, I am taking a mildly bullish bias. I am looking forward to some gains in the Nifty and in individual stocks.
Q: The biggest out performer last week was TCS with 9-10% move; would you continue to add on to that?
A: Yes, because we have to listen to the market. TCS wasn’t a one day wonder. It didn’t go up only for one day and start moving in a trading range and give up its gains. But after a day of rest, it renewed its advance in a market that was listless. So the market is giving significant thumbs up to TCS.
The resistance levels have already been broken after the gap up and it seems that new targets are being set for the stock. So TCS is a buy today with a target at Rs 1,225 for the short-term but it could be higher for the longer.
Q: You would sell Voltas today?
A: Yes, because that entire sector is in dumps. It underperforms when the markets go up and it goes much lower when the markets come down. Voltas is a slightly dicey stock to trade in because sometimes it also gives those mild upswings. But the broad pressure on Voltas is on the downside so Voltas is a short sell. I would expect it to move lower probably crack Rs 100 at some point, that could be a target for the day trader but one should expect Voltas to go below Rs 100 again.
Q: McLeod Russel sees trading activity now and then, is it a buy this morning?
A: McLeod Russel has been a buy consistently. The stock has moved up from Rs 190 onwards. We have seen mild corrections in the stock and then a renewed advance. Nothing is going wrong in tea. In fact the other advantage for McLeod is also that it’s the only liquid stock in that small sub-segment that is tea.
So anyone wanting to have a bullish play on tea needs to come to this stock. But individually the charts are excellent, correcting then again making new highs. McLeod Russell is a buy. Rs 288-290 could be an initial target but I am assuming it will eventually cross Rs 300.
Q: BGR Energy Systems is also a sell for you?
A: The whole infrastructure space is collapsing. It is not going to be so easy for it to go from that collapse to a recovery. We have seen how Lanco Infra has almost given up all its gains, it doubled, tripled and now coming down the same way as GMR.
BGR Energy is a sell because the stock rallied but the rally did not hold on. That was apparently a relief rally in an ongoing bear market. So look for a target of Rs 315 and then eventually again Rs 300 is probably going to be broken here.
Q: Crompton Greaves as well is a sell for you today?
A: Yes it is a sell. We had that big decline in Crompton Greaves in June last year because of news but it recovered, and so I thought maybe that bear market in Crompton was over and the recovery was beginning of a new up move. There was money on the upside and that money was also made. But clearly that was not so. We have these relief rallies which can give the image of a bullish move but they are just that, just corrections in an ongoing bear market. That seems to have happened with Crompton.
Crompton is now a short sell. It’s not the first time and it is becoming a short sell. Look for a target of Rs 123 and I think it is going to break below Rs 100.