Mildly bearish on Nifty, sell: Sudarshan Sukhani

In an interview to CNBC-TV18, Sudarshan Sukhani, s2analytics.com says, he is mildly bearish on the market today. He advises investors to sell the Nifty.

According to him, it would be interesting to watch the Bank Nifty today. "That will be an area for focus," he adds.

Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video.

Q: How do you think trade is shaping up?

A: This week is turning out to be better because the views are more or less matching with what the market is doing. We were bearish on Monday, mildly bullish yesterday.

Today, we would be mildly bearish. So, we would be looking to go and sell the Nifty. But much more than the Nifty it is the Bank Nifty which is going to do something interesting today. That will also be an area of focus.

Q: There are more sells in your list than buys today, starting with Reliance Power ?

A: Yes, more sells because these are the ones that are giving good chart patterns. The buys are not giving any sense to take a trade. So we go with whatever the charts tell us. Reliance Power is now on the verge of a significant decline. It’s made a bearish head and shoulder pattern. Many charts have done that. It’s now breaking below what is called the support levels of that pattern. So I would assume that the follow-through on Reliance Power would be very fast once it starts going down. So that’s a short sell. It’s not just for today, but probably for many days now.

Q: You would be short on a name like CESC as well today?

A: Yes. CESC was a short selling candidate a number of times in the last two weeks because the rally that we saw went up to Rs 315 and it just fizzled out almost immediately. The patterns are the same as for Reliance Power, a bearish head and shoulder which has broken down. So CESC yesterday was in a narrow range. I would expect CESC to eventually reach Rs 200 but that task is going to be slow. Day traders can look for more modest levels but it certainly is a sell.

Q: Technology was the big star yesterday and you have picked Hexaware from that bunch?

A: Hexaware keeps on coming in my list; this is one of those companies that is making new life time highs. Stocks that make new highs don’t suddenly start moving up, so Hexaware continues to be a buy. Yesterday it did very well, the CNX IT did well but I suspect the CNX IT will be a short sell today certainly, after the one and half hours of the market. CNX IT is not a buy but Hexaware is going to be an exception. The rally we saw yesterday, the new highs we are seeing are likely to continue so it’s a safe haven now.

Q: From frontline stocks, Sun Pharma ?

A: You can’t do anything else with Sun Pharma, you have to go and buy it. For the last three-four days Sun Pharma is in some kind of a trading range. It’s reasonable to expect that this trading range will move on the upside especially when the market is likely to turn defensive. For day traders, watch patiently for half an hour and then if you see some strength in it, go for it and keep the stops that are visible to you. But the trade here is buy and today maybe a very appropriate buy.

Q: You maintain your bearish stance on Sintex ?

A: Yes, there is nothing in it because it went to Rs 100 and then literally collapsed, that was a bear market rally. Now it’s broken down from a trading range that was around Rs 80. From Rs 80 it has come down to Rs 78 and the chances are it will go down back to Rs 65, where it started the rally from. It’s a very bearish stock and there is money on the downside because I don’t see any buyers at all.