Nifty to break 5270-5320 range either way soon: Sukhani

"They cannot hold into this range. This 50 point range is going to break one way or the other, probably in a day or two or as soon as possible," he said in an interview to CNBC-TV18.

He suggests traders to be alert and look for trading opportunities once the Nifty breakouts or breakdowns this range.

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

Q: How would you approach trade? Would you say that the market range seems to be tightening again for a near-term trader?

A: Yes. Yesterday we closed all long positions, because the market vendees have gone into a clear range now and that range is very narrow. They cannot hold into this range. The range is, on the lower side we have 5,270 and on the higher side the resistance is 5,320. This 50 point range is going to break one way or the other, probably in a day or two or as soon as possible.

So, the trade then is to take the breakout or the breakdown of this range. Inside these 50 points we can get chopped around for maybe one more day or two more days and thus it’s not worth staying there. So, there is an opportunity coming. Traders just have to be alert on the range breakouts or range breakdowns.

Q: You have an idea on Apollo Tyres for the day, you would choose to sell it?

A: We have been selling Apollo Tyres consistently and it’s not the first time it’s come in the sell list. Apollo Tyres is breaking down from a major distribution pattern and that in a market which is going up. So, it’s some kind of a double whammy for Apollo; the distribution pattern and the relative underperformance. It’s now again going down below a support level, so we look to short Apollo Tyres.

In a choppy market there will be stocks that will go down and Apollo Tyres seems to be one of them with a target of Rs 73 but my own sense is that it will go much lower.

Q: You would sell Tata Motors DVR as well?

A: Yes, Tata Motors DVR has been a disappointment. I had assumed that it would rally from the lows that it made but that hasn’t happened and the DVR is now under performing the equity. So the DVR is a sell, yesterday it saw a narrow range day. That narrow range day usually resolves itself in the direction of the trend. In case of Tata Motors DVR, the trend is clearly on the downside. So we are looking at a breakdown, maybe Rs 125 is the target but if the markets turn choppy for a few days the targets could be exceeded on the downside.

Q: Exide Industries  is a buy this morning?

A: Exide made a double bottom and broke out. It is doing all the right things; it rallies, huddles, corrects then rallies again. For the last three days it’s been a little volatile. But my own idea is that that volatility is a substitute for a correction. So, Exide’s next step should be on the upside. The only problem that I can foresee with Exide is if the Nifty decides to break 5270 and go down then this stock will also get choppy and so we use stop losses.

Q: Biocon has been a bit volatile off late, but you would go with a buy on that?

A: Yes I would because I would assume that like Exide, Biocon has made a double bottom, broke out, it has rallied 20% from its lows. At Rs 240 it is giving the suggestion that it is consolidating and that has been happening for the last three days. Yesterday, it was quite volatile. But these consolidations are usually resolved in favour of the trend and the trend in Biocon is now up. So I would be a buyer here.

In case something goes wrong, we have a stop because we are reaching in the Nifty a level where things could turn around.  But with that Biocon should remain an out performer.

Q: You have chosen Indian Bank ?

A: It is one of the better charts now. A lot of banks have actually rallied a lot. Indian Bank was a relative under performer but that under performance is not going to be permanent. It is now willing to go up; it has made a very nice head and shoulder pattern on the bullish side and it is on the verge of a breakout. So Indian Bank is a buying opportunity.

It could happen that Indian Bank could out perform in a stable or even a choppy market. In case the market itself decides to go down then a lot of our buying ideas will not be good anymore but if the market remains choppy for a few more days then the buys will work.

Q: Has Petronet LNG resumed its uptrend and do you think it will get back to those levels it saw in April of around Rs 170-180?

A: Yes, I think so. Petronet LNG has made a very large double bottom and has broken out of it. Now it’s consolidating. I am assuming the next step will again be on the upside. Petronet is likely to be an out performer, which means even if the markets were to actually come down; the chance is that Petronet could be stable and on some days actually keep on going up.

I do expect it to touch its Rs 180-190 highs and in fact even cross it. So for a position trader you just buy and hold it. For day traders today probably is a good day to go long in it.