Mildly bullish bias; go long on individual stocks: Sukhani

Being an action-packed week, Sukhani advices traders to unwinds their short positions because it is not a short-sell market. “The signs are that this market will either drag itself a few 100 points up and down unless proved otherwise,” he said.

His advice to traders is to go long on individual stocks which could see a bounce after a few days of decline. However, he advices against taking positions on the index.

Below is an edited transcript of his interview with Udayan Mukherjee and Sonia Shenoy.

Q: How would you approach the day?

A: I think today should start with a mildly bullish bias, and the keyword here is mildly. There were some short positions built on Friday, but that will be closed this morning rather than waiting for any event to happen, because this week is not a short sell market any more.

However, there is no sign that this market is beginning a new bull run. The signs are that this market will either drag itself a few 100 points up and down unless proved otherwise. So we are looking at day to day trades now. Next two-three days after a sharp decline a bounce that should come in. That bounce is not guaranteed, but since we have to trade we will go long on individual stocks.

For the Nifty, some day trades on the long side would be considered and otherwise the position for the Nifty is not to do anything as of now.

Q: Your view on Bharti Airtel ?

A: When the correction was going on for the Nifty, Bharti Airtel came down to Rs 300 and it found support at Rs 300. The charts of Bharti suggests that it is beginning a long-term uptrend and that long-term is a subject to definition but it is probably one of the better stocks to buy since the view is that some mild rallies are likely to happen over the next two-three days. It is wise to stay long in Bharti and take a long position. It is an out performer.

Q: What would you do with ACC ?

A: I would buy ACC. We had given buy call on Ambuja Cements and that worked well. ACC is showing almost a similar chart now. It’s on the verge of making new highs. The corrections in ACC were small, which means that the rally itself is not under any pressure unlike the Nifty where we had seen a deep and sharp correction. Cement stocks are doing something which we do not understand but we want to be on the right side. Momentum favours ACC and it is buying opportunity.

Q: You are staying with your sells on public sector undertaking (PSU) banks, Indian Bank today?

A: Yes because all of the PSU banks have cracked miserably, so it’s only a question of which one could go lower today. Even in a rallying market, PSU banks are going to be underperformers. If there is a small rally in PSU banks, we want to go short in that.

Indian Bank qualifies as one of the shorting candidate because it has been an underperformer. It had a trading range, broke down. It saw serious cuts on Friday and that should continue. So a rally is a better position to sell.