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Mkt trend up; recommend buying: Sudarshan Sukhani

Published on Fri, Nov 28, 2008 at 09:44 | Source : CNBC-TV18

Updated at Fri, Nov 28, 2008 at 16:44

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Nifty

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Sudarshan Sukhani of Technical Trends recommends buying today. The trend, he said, is up in spite of the mood due to the Mumbai terror attacks. He feels there might be some volatility in markets, not because of the ongoing event but because of F&O expiry.

Sukhani said foreign markets have gone up, and thus, there is no reason why India cannot catch up with them.

Here is a verbatim transcript of the exclusive interview with Sudarshan Sukhani on CNBC-TV18. Also watch the accompanying video.

Q: How would you trade? Would you buy the early morning dip if it happens? Are we still on course for the 2,900 kind of Nifty target which this move was supposes to take us to?

A: I would still buy. The point of buying could not necessarily be the first tick of the day but the trend is up whatever the events have been and Nilesh Shah just said, there is also an emotion link. I do not think India is sold short on a day like this. So, the markets in any case were right for the rally and that would be the correct approach today. Some volatility is expected not because of the events but because of the F&O expiry. Thus, given those conditions go and buy, we can see 2,900. The markets abroad have been moving up and there is no reason why we cannot catch-up.

Q: What do you do now? You have seen the morning cut and the recovery. From now on do you expect the market to hold a tight range during the day or what's the right way to approach it?

A: It would be a tight range but then the Nifty has the potential of reaching 2,800 which was two days ago. The levels they did touch, so there is a trading opportunity. At the dips or even at current levels, one can anticipate a rally of 40-50 points which is more than enough for a swing trader to buy. Keep a stop loss and the stop loss needs to be little wider because of the volatility. Today, one could actually trade using calls also because that would be almost virtually the same as the futures and probably much less risk.

Q: At what point would you think of winding up any kind of long position which you might have taken for the last two-three days?

A: For the short-term traders which is somebody who takes a position today, 2,680 is roughly the area; a move below that would tell us that its not working out and take our your positions with whatever little losses one has.

For a person who has taken a positional trade we could be reaching 2,900. The stop loss has to be wider which means if we are closing below 2,600 then again its not working out. So these are the two levels for the two different trading segments.

Q: What's your own gut feeling? Is this just a rally which will be played for another 150-200 points on the Nifty or do you think over December it could take us to those 3,200-3,250 kind of levels too?

A: Given the strong downside momentum that we are seeing, it's just a corrective rally that can be played for a few 100 points and by the very definition it is a corrective inside a bear market. It's not easy to trade also. So, a trader could simply say I will step aside while this rally goes on. At this point I do not see this market racing ahead reaching 3,200-3,300 just now. It's very difficult to visualise that with the caveat that the markets can do anything. I am not betting on it.

Disclosure:

It is safe to assume that my clients and I may have an investment interest in the stocks/sectors discussed.