Nifty in short-term uptrend; buy on dips : Sukhani

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Nifty in short-term uptrend; buy on dips : Sukhani

Sudarshan Sukhani, technical analyst of s2analytics.com feels that Nifty is in some kind of a short-term uptrend but he expects the stall seen yesterday to continue even today.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Sudarshan Sukhani See what other Experts & Brokerages are saying about Godrej Ind See messages about Godrej Ind

Sudarshan Sukhani, technical analyst of s2analytics.com feels that Nifty is in some kind of a short-term uptrend. "We are much higher as compared to last week's close. So, the emphasis should be on some kind of buying on dips, "he added.

However, he expects Nifty to give 30-40 points on the downside after opening. "I would suspect there is a buy towards 4,900 levels. The Nifty is likely to chop around for at least a few days and make a new trading range ," he added.

Godrej Industries , HCL Tech , ACC , Pantaloon  are on Sukhani's buy list today.

Below is the edited transcript of Sukhani's interview with CNBC-TV18.

Q:  What is your call on the Nifty?

A: I suspect that the stall should continue today. But we must understand that the market is in some kind of a short-term uptrend. There is no confusion on that. We are much higher as compared to last week's close. So the emphasis should be on some kind of buying on dips.

Fortunately, yesterday we did not have to buy on a breakout. It never took place after the opening, but today it is possible that after the opening the markets can give us 30-40 points on the downside. I would suspect there is a buy towards 4,900 levels. The Nifty is likely to chop around for at least a few days and make a new trading range.

Q: If you had to choose would you rather trade in stocks right now rather than the Nifty which is still somewhat range bound whether gains might be small?

A: Yes, that's right because the Nifty is range bound and these ranges can breakout either side while we all will be positioned on year-end rally, we really don't know. But a lot of individual stocks will move up in a choppy market after all half the stocks do move up and it's easier to go long in stocks. So, yes stocks are a better idea as of now.

Q: What is your view on Godrej Industries?

A: Godrej comes very rarely in the list. It's been in a trading range, then it broke down from the trading range, but it did not meet its targets. It rallied almost immediately. That's a good sign. This indicates that lows were not sustained and there is strong support at the lower levels around Rs 180.

So now it's moving up slowly and softly. It's a sector that's primarily in focus. People like it. So, I would say that the rally that we have just seen, the bounce from Rs 180 augers well for it. We should be looking to buy it today. The idea is that we are in a good sector good stock and in a choppy market.

Q: HCL Tech hasn't moved in a while, but do you think that's good for a buy today?

A: Yes, it's been an underperformer. While Infosys and then TCS have moved up significantly, HCL Tech was in a trading range for the last 10 days. Yesterday was slightly different but even then yesterday HCL Tech broke out of that trading range.

The fact that it broke out of the range and its peers are doing much better suggests that this one may do some kind of catch up. A range breakout by itself is a buying suggestion. So, HCL Tech has some room on the upside.

Q: What about ACC?

A: ACC is a remarkable stock in the current context. It had a very minor dip. It's going on. It's moved up from Rs 1,000-1,200. It's in the bull market while the market was languishing and falling. After that, a very brief correction in ACC now is something that is called a small flag.

That flag tells us that there is significant upside now coming in ACC. So I suspect for the position trader one can buy ACC and keep it. For day traders a flag breakout could be a very interesting pattern. We could have big intraday moves. So, for both these styles of trading I would suggest ACC as a buy.

Q: What is yopur take on Pantaloon? Is it on your buy list?

A: Yes I have been abide on Pantaloon although at Rs 220 after the gap up didn't work out. But the fact is that Pantaloon is building not only a small base but also a fairly bullish head and shoulder pattern. So that justifies buying it. It fell to Rs 195, it's rallied again and it fell almost to something called the net line of the head and shoulder pattern.

That's the perfect support level and it found support there. Now not withstanding the news that's going to come on and off, Pantaloon is a buy. One could actually use options rather than futures. Pantaloon options are very liquid because volatility can sometimes trouble you.

Q: Why is McLeod Russel on your sell list today?

A: McLeod Russel had a very deep decline, Rs 260-180. Its rallies on the back of the Nifty, but the charts suggest that it has reached a point where it should face significant resistance around Rs 220.

So, it could start facing resistance now. It's a short sell. In a choppy market it is possible to sell a stock and make some money. Too much expectation should not be built into the selling idea, but I assume it's going to go down, maybe to Rs 210-215.

Q: Havells has been a relatively strong stock, but do you think the run is done on it?

A: It could be. Yes, it's been a relatively outperformer, but yesterday it went and tried to cross the highs of Rs 430 which it had made and then fell completely. That could be the first sign that highs made by Havells are likely to sustain. There is a significant risk.

We are trying to sell almost at the top of a move. But if this is correct, if the highs will hold then we are selling at highs which is very nice. So, one should keep a stop loss and understand that this could go wrong. If it goes right, we can have a very significant correction on the downside and it's worth looking at.

Q: The rupee corrected quiet a bit yesterday all the way down to about 51.30-51.40. What kind of levels are you watching there for support?

A: The support for the rupee is somewhere around 50.20 per dollar. That's a lot of gap still left and it's anybody's guess how the currency will work. But in between 50.20 levels and the highs that it made 52.70 levels there is nothing else.

Disclosure: I have no personal holding in the stocks discussed.