Nifty may retest 2011 lows in January: Sudarshan Sukhani

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Nifty may retest 2011 lows in January: Sudarshan Sukhani

The Nifty broke 4,700 today. Sudarshan Sukhani of s2analytics.com says, the Nifty will eventually slide down to 4,600. “It’s a shorting time. We could retest the lows of 2011 in January,” he adds.

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Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See previous views by Sudarshan Sukhani See what other Experts & Brokerages are saying about Reliance See messages about Reliance Reliance BSE | NSE 29/05/12 Are Mutual Funds betting on Reliance? Other Stocks in this news Bharti Airtel | Bharat Heavy Electricals | Hindustan Copper | State Trading Corporation of India | Oil and Natural Gas Corporation |

The Nifty broke 4,700 today. Sudarshan Sukhani of s2analytics.com says, the Nifty will eventually slide down to 4,600. "The range that we were looking at for the last two-three days is now decisively broken."

He further says, the Nifty could retest the lows of 2011 in January. "There is significant selling at higher level," he adds. 

According to him, it's a shorting time. "This is a time when we want to go short."

Also read: Sensex may hit 14500 in Jan-Feb, 18000 by yr-end, says Ambit Cap

Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Ekta Batra. Also watch the accompanying video.

Q: What have you gauged from the performance of the Nifty this far?

A: Today, we were a little flexible. The range that we were looking at for the last two-three days is now decisively broken. Once trading range develops and is broken, the market usually tests the outer boundaries of the other breakout side, which is the downside this time. It seems reasonable to assume that the Nifty will eventually slide down to 4,600 from where we had bounced back. That's not a good news.

Q: Is it a shorting time?

A: It's a shorting time. This is a time when we want to go short. Our stops are slightly deep at 4,780. That's a risk we have to take at the initial stage of any trade.

Q: Do you think then that we could retest the lows of 2011, possibly in January, if we break 4,600?

A: I think so. I have been saying that the 2011 lows are not final. That's something that was made as an intermediate bottom. We are barely able to rally. We went to 4,800 retreated then we tried to reach 4,800 yesterday we did not succeed. We have come back and given up 100 points on the Nifty. So, there is significant selling at higher level and there is absolutely no buying. This market needs to find lower bottoms where buyers will come.

Q: What levels you are watching for on the upside? Where is the upside caped for us at this point?

A: The upside is now almost decisively capped at 4,800. Yesterday was the third attempt to reach that target. That was a dismal failure. So, 4,800 is a make or break level for the Nifty.

If the Nifty does cross 4,800, we should then reassess our position and say something good is going on. As of now, it appears that the levels are going to be difficult to cross. We should now be watching support levels break down one by one.

Q: What will you make of the relative outperformance of Reliance today? Is that giving you a trading punt or any opportunity?

A: It's not. I would stay away from it. Sometime even largecap stocks move randomly for some reason which we cannot discern. There are no patterns to justify buying in Reliance

Disclosure: I do not have a personal holding in any of the stocks discussed.