Mkt to be choppy; see resistance at 5230-5250: Sukhani

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Mkt to be choppy; see resistance at 5230-5250: Sukhani

Due to the decent rally in the market the past few weeks, Sudarshan Sukhani of s2analystics.com expects the market to consolidate a bit.

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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 Larsen See messages about Larsen

Due to the decent rally in the market the past few weeks, Sudarshan Sukhani of s2analystics.com expects the market to consolidate a bit. "The market could be choppy for a while; for the short term, 5230-5250 is where the Nifty will see some resistance," he said in an exclusive interview to CNBC-TV18.

On the downside, 5050 is his stop loss, advising traders to exit all long positions if the Nifty falls below that level.

For the new series, Sukhani says that the strong uptrend in the market is likely to continue. "What actually happens by the end of this month is difficult to say, but the trend is clearly up and the bias should be on the long side," he said.

Below is an edited transcript of his interview with Mitali Mukherjee and Sonia Shenoy. Also watch the accompanying video.

Q: Stepping into a new series, what kind of pit stops would you put on the Nifty this morning?

A: The new series has a strong uptrend in place, so I would assume that the Nifty is likely to move higher. What actually happens by the end of this month is difficult to say, but the trend is clearly up and the bias should be on the long side.

Q: Banks had a stellar performance last series. Would you choose to buy something like Axis Bank this morning?

A: Yes. Private sector banks have been outperformers and Axis Bank is one of them. After a very deep decline, which could actually be a bear market, Axis has recovered, built a base and keeps on going up.

So even now assuming that the market remains choppy for a couple of days or more, Axis Bank is a buying opportunity as is ICICI Bank and Yes Bank and these private sector ones. But Axis Bank is a trade that can be taken today, look at target of Rs 1100 or so. Ideally you want to buy it on an intraday dip or an intraday consolidation.

Q: Talking about a more midcap stock, you have a buy on Bata India for the day?

A: Yes because Bata is in a stupendous long term uptrend. It started this uptrend from Rs 150, reached Rs 750 then went through a deep correction because when you have such a big move the corrections are inevitable. That correction is over, so sooner or later it seems that Bata will make new lifetime highs because these long trends don't stop immediately.

Price action tells us that Bata is now ready for small up move, but that small up move can convert into a lager one. But its one of the better stocks to swing trade today for a short term, for a day or even for carrying positions. So buy Bata, the reasons I have explained already and look for a target of Rs 650, if you are a position trader keep some of it.

Q: If you're call is that things are going to turn a bit choppy, what kind of levels would you watch on the downside even to gauge whether or not the short term trend is snapping?

A: 5050 is my level for exiting long positions. As we stand today, that's a good 100 points down, so for the first entries which were taken when Nifty broke 5100, there is a risk of 50 points and a potential reward that is much higher. So 5050 is the support level, if that breaks all long positions should be closed.

On the upside, the market could be choppy simply because we had a very decent rally in the last two-three days. Market rallies and then goes through a consolidation or a choppy process after which it resumes the next leg of the rally, which is why I feel that maybe somewhere around 5230-5250 we will have short term resistance.

Q: Dabur is a sell this morning?

A: Dabur is a sell. It actually went through a correction when it became a buying opportunity, but that buy did not really work out because it seems that it's more in a trading range. So at current prices, it's a short term sell.

If you are taking a day trade, if you are taking a swing trade for Monday or Tuesday, you could consider selling Dabur with the stop loss of Rs 96 and maybe you will get lower levels here. The charts are not conducive to a big rally in fact they are getting pushed on the downside.

Q: What about Adani Power , would you sell that as well?

A: Yes and that is inspite of the fact that Adani has seen a very big rally from the lows of Rs 55-60 all the way up to Rs 90. But for the last three days, that rally is facing significant resistance and it's been falling for three days now.

Two things are possible; that rally could have been a bear market move and the original down trend will resume or we at the very least see a deep correction and if deep correction is in the offering then Adani Power is a short sell. Actually even Adani Enterprise is a short sell but Adani Power probably is a more appropriate candidate because the rally has been little sharper there.

Q: From the front liners, what would you do with something like Infosys this morning?

A: I would buy. Infosys declined after its Q3 results but then stopped at Rs 2500-2550 and for the last six-seven days it's not moving down. That's a big message and the next leg of the Nifty, if the Nifty moves up will be supported by all the major IT stocks Infosys, Wipro, TCS. It's not as if they are going to stay aloof.

The charts suggest that they have reached short term lows even TCS. So Infosys is now a buying opportunity, I would say to viewers consider Infosys and TCS as a buy on every dip now don't think they are going down now. They have already been come down so this spring or the upside movement is that much more.

Q: Finally on your buy list, Voltas ?

A: Voltas is an excellent stock to buy. Rs 270 at the bull market highs, then Rs 75 so clearly that was an exaggeration, exuberance they had. Maybe this decline was also an exaggeration on the downside. It's made a beautiful head and shoulder pattern that suggest that the reversal is going to be significant on the upside. So it's just beginning its up move.

Voltas is really position trade, you buy it and hold it but for short term traders it's just breaking out of the head and shoulder resistance. So not just for today but for the next few days you want to buy it at any opportunity during the day and hold on some days you will get big moves in it. So Voltas is beginning a bull market and deserves a buy tag.