Nifty may see 5800 in near-term; go long: Sudarshan Sukhani

Also read: Nifty to range between 5600-5800 in October, says Ambareesh Baliga

Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Sonia Shenoy.

Q: How would you approach the Nifty today?

A: We have been short on the Nifty. Now, there is a sense that the market remains in a trading range. The Nifty could be above 5,700. So, in the morning, we plan to close our short positions and actually go long. Now, this long is not a positional long, it is not something that I am expecting the markets to cross 5800 and go higher.

It is just that short-term momentum is changing in favour of the bulls, atleast for the next few days. So, we should be on the right side of this momentum. Our possible targets for this move could be 5,780, even 5,800. That’s the basic strategy for the day and for the next two-three days.

Q: You have a lot of interesting midcaps in your list today. Let’s start with Exide .

A: Exide has been in a sustained and a very nice uptrend, a classical chart pattern. It goes up, consolidates, breaks out and moves up again. Now, it is on the verge of a new breakout on the upside. So, Exide becomes a buying opportunity. Yesterday it saw very handsome gains while the Nifty was more or less flat and these trading ranges have actually put it at a short-term cyclical low.

What we can expect is a rally which is in any case expected. After a trading range, markets will go up or down. In this case the expectation is that given the internals of that range, it should cross higher. So, it is a very interesting buying opportunity.

Q: What is your expectation on Dishman Pharma ?

A: What has happened is that we are now looking at a lot of midcaps because the opportunities are coming in midcaps. The Nifty is in a trading range. So, heavy weights and Nifty components are likely to mimic the Nifty. Dishman Pharma was one of those big rallies. After that rally, for the last 1.5 month it is in a small trading range. That’s a consolidation. So, instead of going and correcting prices, strong stocks will simply drift sideways which is what Dishman did.

Now, it is again breaking out of a falling wedge which is a fairly bullish pattern to be in. Yesterday, it saw good volumes, good price action. So, I think we are now buying on the verge of a new breakout on the upside. Once midcaps start moving, they move well and pharma is also a good sector to be in.