SENSEX NIFTY
Jan 02, 2013, 11.38 AM IST | Source: CNBC-TV18

Nifty may see 6030-6040 soon; go long: Sudarshan Sukhani

In an interview to CNBC-TV18, Sudarshan Sukhani, s2analytics.com says the immediate target for the Nifty seems to be 6,030-6,040. "We should be buying the Nifty not just for an intraday trade, but for a much longer move," he adds.

The Indian market began the New Year on a strong note. The Sensex ended at 19,580, up 154 points on Tuesday. The Nifty closed at 5,950, up 46 points.

In an interview to CNBC-TV18, Sudarshan Sukhani, s2analytics.com says the immediate target for the Nifty seems to be 6,030-6,040. "We should be buying the Nifty not just for an intraday trade, but for a much longer move," he adds.

Also read: 2013 to be a happy year; Sensex may hit 21000, says HSBC AMC

Below is the edited transcript of his interview on CNBC-TV18.

Q: What is your target on the Nifty now?

A: I am assuming that traders are long. They should have come in yesterday with a long position or built one yesterday morning. We are now looking at a positional trade for the Nifty on the plus side.

We should be buying the Nifty not just for an intraday trade, but for a much longer move. We have had a four-week trading range. That has broken down decisively. January is a good seasonal month. So, I will not discuss the eventual targets for this upmove because that is not visible just now, but the immediate target for the Nifty seems to be 6,030-6,040.

The Nifty would still have more space to go up. Intraday targets are much more difficult. The key is to go with the momentum and stay long or build long positions. That itself will give the trader a big advantage.

Q: Pantaloon Retail is in your list of buys today?

A: It is surprising. Pantaloon was a disappointment for so many months and years and now it has crossed Rs 200, made the right chart patterns; it is embarking on its own bull market. After a big rally Pantaloon was in a trading range. It is now breaking out. It is a momentum stock, high beta play and a stock that has built a base and is now coming out of it. So it qualifies as a buying opportunity in all aspects. We are buying it today because the breakout is imminent. It has already started that yesterday and I am assuming it will build onto it. Once a stock breaks out then there is a strong momentum play on the upside till it begins another new range. That could take sometime.

Q: Do you think Rural Electrification Corporation (REC) should also outperform the Nifty?

A: At least today. Rural Electrification Corporation made a trading range. It is on the verge of a breakout. It actually closed higher than the resistance levels yesterday and that suggests that it is a same story as in Pantaloon; big rally, trading range as was in the Nifty. The Nifty broke out yesterday and naturally some stocks will follow on the subsequent days, which is what is likely to happen today. So REC is an excellent play. The stock chart was very good by itself, built a base and came out of it and today specifically I think intraday traders should focus on this stock. If it closes strong, carry it. There is a big move upcoming here.

Q: You are cautious on the IT bunch though. You are selling Tech Mahindra ?

A: Yes. The midcap IT has been disappointing in any case. I have been upbeat on the largecap IT, which is what the CNX-IT consists of. The midcap IT was generally disappointing. 

Tech Mahindra had a big decline, a small rally and then it started turning down. So that small rally faced resistance at an earlier resistance level. It is also telling us that that was a bear market rally in an outgoing downtrend. It actually is losing points in a time when the Nifty is moving up. It is a short sell. It is in the Futures & Options (F&O) segment that is why the short sell is possible. I think independently and as a hedge it is worth looking at it.

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