Nifty may touch 5400 in July: Sudarshan Sukhani

In an interview to CNBC-TV18, Sudarshan Sukhani of s2analytics.com says, there is a certain amount of optimism. “The bias still remains bullish. My sense is that we are going to cross 5,200 and maybe touch 5,400 in July,” he adds.

Also read: Sensex to gain 10% by year-end, says Reuters Poll

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

Q: How is the stage set for the new series?

A: I think we are going to see a continuation of the uptrend. The bias still remains bullish. We took up some tentative long positions yesterday. I hope to build on them. So, my sense is that we are going to cross 5,200 and maybe touch 5,400 in July. All in all, there is a certain amount of optimism.

Q: Havells India is in your buy list today?

A: Havells has been in a trading range for sometime. That is not a bad news, its good news because it didn’t come down when the markets were correcting. It inched up yesterday from resistance level at Rs 570, it wasn’t much but still it was there. So we are seeing a final resolution of this trading range on the upside. The fact that it did not correct when the market fell to 4,800, goes in its favour. So Havells is a buying opportunity starting today. I think it’s more than a day trade. It’s a better positional trade but one should enter it.

Q: How about Century Textiles ?

A: It seems to be that the downtrend or the bear market in Century Textiles is over. A bullish head and shoulder pattern was confirmed. We had Century in our buy list earlier and that continues. Yesterday, Century had some gains suggesting that the head and shoulder targets of Rs 310-315 are likely to be met. But once a momentum starts in favour of the uptrend, it’s not necessary that the targets have to be met and stock stops there, it could easily overshoot. So, at this point, Century is a buying opportunity for day traders and also for position traders.

Q: You have couple of sells on your list as well, BEML is one of them?

A: Yes and it has been a terrible disappointment. At Rs 350 BEML should have started building a base and go up but it is not doing that. It hardly had a uptrend when the broad market was going up and then it has turned around again. So if not anything as a hedge, even as an independent shorting idea BEML stands scrutiny is acceptable. In a market that is going up, selling short is not easy but here is a stock that could actually be sold.

Q: BPCL is a stock on your buying list?

A: BPCL has a very good chart. Sometimes these oil marketing companies (OMCs) suggest that their time is coming and then nothing happens. I wouldn’t be able say exactly how it will pan out but the sense seems to be that they are going to go in a very big uptrend. For the short-term trader BPCL had a minor correction, it has begun its rally again and the chances are we will see it cross Rs 770-780. In any case it is a perfect buying opportunity.

Q: Sterlite Industries is also a sell for you?

A: Sterlite Industries is a disappointment, it had a rally and then it has gone in a trading range. Now Sterlite comes in the sell list because metals are broadly under performing. So for anybody looking to hedge long positions, Sterlite is a perfect opportunity. Earlier we had Hindalco and that did come down. Sterliete and Sesa Goa together are not doing the right things. They are giving the impression of a very weak environment for themselves. So, Sterlite actually could continue going down even if the broad market goes up.

Q: Opto Circuits is on your buy list today?

A: It kept coming in my sell list all the time starting from Rs 220-230. This is a joker in the pack; it has not really turned around. It made a small trading range and then it broke on the upside. It is not enough to say that the downtrend has changed but it is enough to say that at least for short-term traders, momentum has turned up, so maybe there is a short-term buying opportunity here. If it is this is a high beta stock and it can give us some good gains on the upside. But don’t get committed to it, it is not an investment or a position trade but its worth buying.

Q: If today you are going to play for a breakout or the market does breakout of 5200, what is the best instrument to go long with at this point, would it be an Option you would go with Futures, would you rather trade the Bank Nifty?

A: We will trade the Bank Nifty that is Futures in the Bank Nifty because they are easiest to trade. I think Bank Nifty probably is going to out perform again. Now for the Nifty, thanks to the new series, traders have a lot of Options.  Primarily we have bought 5100 Call Options and if the market goes up that will start going deep in the money. We will continue adding 5100 Call options, keep it to one instrument. It is possible to buy Futures and that is perfectly fine.