Nifty stuck in 5000-5130 band; trade on long side: Sukhani

One should wait patiently for these levels to be taken out because once Nifty breaches these levels it gives a reasonably decent move, he added.

Below is the edited transcript of Sukhani’s interview with CNBC-TV18. Also watch the accompanying video.

Q: Yesterday we had a slightly more bumpy session, how would you approach it as a Nifty trader this morning?

A: The Nifty has now gone again in a trading range and that range is 5,000 on the lower side roughly and 5,130 on the upper end. So, we have a 130 point range. Inside this range, most markets will keep on giving us those bouts of pessimism and optimism. Yesterday we had pessimism maybe we will have optimism today. But the thrust still remains.

We are locked in a narrow range and a trade will emerge when the Nifty moves above 5,130 or below 5,000. So at this point the only way to trade it is to do some intraday trading on the long side maybe today, just intraday, but wait patiently for these levels to be taken out. We have seen repeatedly that once the Nifty takes out a level it gives us a reasonably decent move. I know it’s a little irritating and patience is not easy, but that would be the wisest course of action.

Q: Yesterday infrastructure stocks did not do well, but you have picked IRB Infra as a buy today?

A: IRB fell dramatically on news etc and now for the last one and half months, it’s making a trading range. It has broken out of that trading range. I am assuming that yesterday was one of those moves which the market does; one day it just dips because there is nothing else to do. So I am not putting too much importance on what happened yesterday. If that is so, then IRB’s breakout is valid and we should expect more upside from current levels.

Q: Titan is a sell in your book.

A: Titan is a sell. Titan made what was then finally understood as a large distribution pattern. It’s broken down from the Rs 240 range. It’s now consistently slowly moving downward. The pattern targets are below Rs 200. So Titan is a sell at every opportunity and I think it’s a positional sell also. But for day traders, yesterday we saw a narrow range in Titan that should break on the downside today.

Q: Cement has been pretty stable this week. You are buying ACC ?

A: Yes. We bought it earlier also. ACC has an excellent chart. ACC makes these perfect chart patterns. It’s made a beautiful small bullish head and shoulder and it’s broken out of that. That tells us that the correction is over. It’s probably going to eventually go and test Rs 1,300 highs but obviously for a day trader that’s not the target. We have much more modest levels in mind. But the trade is on the long side. It’s a good trade to be in ACC and although not discussed today even Ambuja .

Q: Century Textiles is a sell today.

A: Yes it is a sell. I was very upbeat on Century, Bombay Dyeing, Raymond. The other two are still there, but Century has completely turned around and as traders, we have to be flexible. If the market says I don’t like a particular stock then we as traders don’t like it either. Century has been a short sell earlier also. The stock doesn’t seem to be stopping anywhere. There is no support. It’s simply giving us a waterfall decline. We have heard some reasons why this is so, but whatever the fundamental reasons, the charts are very, very poor for Century. It’s a short sell even in a rising market.

Q: Do you think Lupin is also headed lower from here?

A: Yes and there is a theme here. Most pharma and FMCG stocks excluding Hindustan Unilever are now showing signs of distribution and they are moving lower. These essentially will be corrections in an ongoing bull market. But the corrections will be sharp or steep enough to take advantage of the downside momentum and Lupin has done that. It’s broken down. It’s now looking towards heading lower. It’s a relatively low-risk short sell because most pharma companies are doing this now.

Q: What about Infosys ? You seem to be bullish on that from this current level of around Rs 2,400?

A: Yes. Rs 2,400 is the point where Infosys opened when it opened with a lower gap after its results. Now Infosys has come back. All its losses have been recovered. It’s exactly at the point where it was when t first responded to bad news. Any further gains in Infosys will start filling that gap between the earlier price and the post-results price.

Filling of a gap is usually bullish. I have been maintaining that Infosys is probably the best of the four IT stocks to be long in. I would be long in Infosys not only as an intraday trader but probably look for a long position that goes all the way to July.