Technical analyst, Sudarshan Sukhani, s2analytics.com warns that May will be a different from April and this momentum will not continuing in the same force, which suggests that market is likely to be choppy.
In an interview to CNBC-TV18 technical analyst, Sudarshan Sukhani, s2analytics.com shared his reading on the market. He warns that May series will be choppy and momentum seen in April may not continue.
"It is very unlikely that this market will keep on going relentlessly up. So, May is going to be a difficult month to trade. We will find out in this month whether that old adage, sell in May and go away, works out. I think it will," he said in an interview to CNBC-TV18.
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Q: How is the pitch set for the new series?
A: So far it is fine. We are seeing strong momentum and we have been suggesting buying, maintaining long positions, taking profits, reentering, all of it to catch this upmove. May is going to be different from April. I do not see this momentum continuing in the same force. That suggests that market is likely to be choppy. We will also see corrections.
It is very unlikely that this market will keep on going relentlessly up. So, May is going to be a difficult month to trade. The much larger part is, was this a correction in an ongoing downtrend. I would suspect that is so. We will find out in this month whether that old adage, sell in May and go away, works out. I think it will.
Q: You are buying some of the stocks, which have shown momentum of-late like Tata Motors ?
A: We are short-term traders and momentum is on the side of the longs. Tata Motors at Rs 285 has just broken out yesterday. Yesterday’s breakout could easily be because of settlement considerations.
However, assume this breakout is genuine, if not anything there is a scalping or a short-term trade here on the long side. The market has not stalled. I am saying the chances are there. So, Tata Motors remains a buying opportunity on a breakout. When the market reaches its top, breakouts become a suspect. So, traders must keep stop losses.
Q: You are not so bullish on Tata Chemicals ?
A: Tata Chemicals has done exact opposite. It has been rallying and rallies get stalled and stopped. It is suggesting that it is making a long consolidation from which it is going to breakdown on the downside. We are selling at the top, if this works out today then this is a trade that can easily be carried on. So, it is not just a day trade, it is something that can look for a longer period of time on the short side. I would be fairly bearish on this stock.
Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed.
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