Mkt momentum visibly in favour of bulls: Sudarshan Sukhani

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Mkt momentum visibly in favour of bulls: Sudarshan Sukhani

Sudarshan Sukhani, s2analytics.com spoke to CNBC-TV18 about his strategies to play the market today.

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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 Punj Lloyd See messages about Punj Lloyd Punj Lloyd BSE | NSE 29/05/12 Are Mutual Funds betting on Punj Lloyd? Other Stocks in this news Larsen and Toubro | Bharat Heavy Electricals | Hindustan Unilever | ITC | Cairn India | Raymond | Bata India | Shree Renuka Sugars | Aban Offshore | Bombay Dyeing and Manufacturing Company |

Sudarshan Sukhani, s2analytics.com spoke to CNBC-TV18 about his strategies to play the market today.

Below is the edited transcript of the interview. Also watch the accompanying video.

Q: We managed to hold afloat on the Nifty yesterday. Does the trading stance still remain long for a Nifty trader?

A: Yes, it does. In fact, we managed to hold it. We also opened lower and closed at the top of the day and that was different from the earlier three days when there was a lot of indecision. So yesterday the markets did say that it's not only long, but I think I am ready to go higher. Therefore, the stance remains long and it's a buy on dips market or hold your long positions.

Q: Let me start with infrastructure where you have a couple of buy items today. Punj Lloyd after a long time in your list?

A: Yes, it has been a long time. How the mighty have fallen, where it was and it reached a low of Rs 37. But it's building a base and it's going up. Most infra stocks are going up now. Some of them have run up so much that they are not anymore a buy. You have to avoid them or even go and short-sell. That's not the case with Punj Lloyd. It's just beginning its upmove. I think there is a lot of steam ahead before it faces overhead resistance, so Punj Lloyd is now a buy.

Q: How about L&T from the same bracket?

A: L&T has dipped below Rs 1,000 and almost immediate rallied from those levels. It tells us that that the level is now acting as significant support. L&T and BHEL , they are some kind of twins now and are both moving up. Capital goods as a broad sector has been now doing well and there is some more upside left. What it is doing is after a big move up, it consolidated for a couple of days and it has broken out of that consolidation. That tells us that probably another 100 points in L&T is easy to achieve. So we have a target of Rs 1,270-1,300 and that would represent a 30% gain from the lows. So the capital goods is doing something remarkable.

Q: You are selling the defensives. Let's start with HUL .

A: Yes, HUL is doing something quite the opposite of what ITC is doing. So while yesterday we were buying ITC and today also, it's not in my list but its there and it is still a buy. HUL is just the opposite. It rallied when the market was falling, now it's ready to go for a deeper decline or a deeper correction. It's a defensive and people get out of it. People also think this is a good idea because it's also hedged against long positions. So HUL seems to be on its way down and probably lower levels are coming where I hope it will become a perfect buy again. But at this point you want to sell it.

Q: It's been a really strong run for Cairn and you see more upside on that stock?

A: I see more upside. I see Cairn making new highs eventually. Cairn did what is a classical correction. A three day correction in an ongoing bull market. It's completed its three day correction yesterday. It started a rally and today I expect it to certainly cross Rs 340 and start moving towards Rs 350 and eventually Rs 400. We have been talking about Cairn when it was sub Rs 300, okay go and buy it. Now it's a slow mover in the sense it's not a high beta stock, you don't get 30% returns. But I don't think we need that. It's giving steady returns and something that we can actually count upon.

Q: What about Raymond ? Do you like that chart too?

A: Raymond went through some kind of a mini-bear market when it fell from Rs 400 almost dramatically to sub Rs 300. That decline seems to be averse because Raymond essentially is in a long-term bull market. So we had a very sharp correction in that stock. At Rs 300, there were buyers and now, that buying support has shown itself as a trading range and a breakout from a trading range. So I think Raymond is in a long-term bull market and a very sharp correction is a perfect buy on dips opportunity. This is a day trade or a swing trade for a couple of days, but it is not only for them, but also for the investor who was waiting for this kind of a dip. So I think Raymond qualifies on both counts.