Jun 25, 2012, 10.44 AM | Source: CNBC-TV18

Nifty may see 5200, remain long: Sudarshan Sukhani

Sudarshan Sukhani of s2analytics.com says, the trend is up. "Trade is still to remain long on the index," he adds. According to him, the Nifty will reach 5200 and maybe higher in the next few days.

On Friday, the Sensex fell 60.05 points and closed at 16,972.51. The Nifty dropped 18.95 points and ended at 5,146.05.

In an interview to CNBC-TV18, Sudarshan Sukhani of s2analytics.com says, the trend is up. "Trade is still to remain long on the index," he adds.

According to him, the Nifty will reach 5200 and maybe higher in the next few days.

Also read: Market may remain volatile ahead of derivative expiry

Below is the edited transcript of his interview with CNBC-TV18’s Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.

Q: We are heading into an expiry week. What kind of upside would you work with as a Nifty trader?

A: The trade is still to remain long on the index. The market has held on to support levels, 5,000 is way down, even 5,040 has been holding steady. Is the trend in any kind of difficulty? The answer is it is not.

I assume what is irritating to traders is the fact that the market is not obliging us by immediately going up. The market will do what it wants and it doesn’t respond to one’s wishes in that way.

The trend is up. So, we stay long. It is very difficult to make a call on expiry. I would have thought 5,200 was within easy reach this Thursday, but there is so much of news. So, the idea is that we will reach 5,200 and probably higher in the next few days. I do not know about this Thursday.

Q: Hindalco is a sell in your book?

A: Yes it is a sell because the rally that one saw in Hindalco and the bullish pattern that was made has failed. Failed bullish pattern has its own implications on the downside. It’s a pity because I own shares in Hindalco. Metals have been underperforming but this is distinct under performance when patterns cannot meet their targets on the upside. Hindalco has turned around. In a choppy environment it is likely to go down; of course if the broad market suddenly starts to move up, it may not go down as much or may under perform but the fact remains that it’s a short sell.

Q: You would say the same of SAIL as well?

A: Yes SAIL is also a sell. The stock is now on the verge of completing a fairly bearish pattern but it’s difficult to say how much lower this stock can go. The market seems to be pricing in a lower price. An immediate target for SAIL is Rs 87 but that may not be the end because it could slide down to Rs 81-82.. It could happen that maybe the market maygo up and in that case these targets won’t be met but they will remain underperformers and for today both the metal stocks are short sell.

Q: HDIL is a buy today?

A: Yes HDIL it is a buy because it has done all the right things and built a base for almost one and half months. Then went through a mild correction and on the last two days has been going through some dramatic rallies. I feel that these rallies are not going to end soon. We will have consolidations and some small dips which are excellent buying opportunities.

The stock is suggesting that this is the first leg of what could be an interesting uptrend and the first leg will not end. So this is a stock we want to go into at every opportunity, as a long candidate and today one can see a follow-through for Friday.

Q: You have same strategy for Reliance Capital ?

A: Yes, same for Reliance Capital. It has almost similar charts like HDRIL except that HDIL’s percentage moves have been larger and it is a high beta stock but Reliance Capital seems to have found its lower levels. Rs 270-280 is the bottom that we are seeing and it is very likely that it will hold.

Currently, the stock build a base, broke out, corrected and now has renewed its advance. That correction could be a flag, which is often midway suggesting a target of Rs 410 or even Rs 415 or Rs 430 eventually. The Reliance Capital targets are Rs 377-380 for the current one-two day upmove or if it gets postponed for two-three days. But the stock is a buy.

Q: You have also picked IndusInd Bank from the financial space?

A: Yes, its one of the better banks and IndusInd is making an excellent pattern. It fell from almost Rs 400 to Rs 300 and that is a deep correction by any standards. That correction seems to be getting over and if that is so, then after a deep correction the stock will find its levels at Rs 400 and if banks do well, it’s likely to outperform.

On Friday we have something called an inside day in IndusInd Bank and that’s usually a sign that a big move is coming. For short-term traders, IndusInd is a buying opportunity. Wait for first 15-20 minutes and if strength is seen then go long immediately.

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