Nifty in uptrend; remain positioned on long side: Sukhani

All eyes are now set on the outcome of the Federal Reserve meeting which ends today and whether Chairman Ben Bernanke announces another round of stimulus .  

Technical analyst Sudarshan Sukhani of s2analytics.com advises to be remained positioned on the long side. If the market is obliged with QE3 then one could see gap-ups in the first half tomorrow, he added.

Nifty continues to be in an uptrend, but he suggests short-term traders to book profits if the market moves in their favour.

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

Q: What is the call on the Nifty?

A: The Nifty continues to be in an uptrend. The trading idea is to be positioned and remain positioned on the long side assuming something happens overnight, we should see gap ups or at least some kind of an euphoria in the first half of tomorrow but this euphoria is not going to last.

While the trend is up short-term traders should take profits if they find any big move in their favour. The chances are the market will consolidate.

Q: Why is CESC on the sell side?

A: Its equal because I am sensing that apart from any overnight gap in favour of the bulls the markets are likely to turn choppy for some days. CESC has been a very big disappointment, a rally fizzled out completely and it is now making an unusual bearish pattern at the lows of a trading range. If that is so, and if it works out then it’s going to break a long trading range and go into unchartered territory on the lower side. It’s a bad chart.

Q: Alstom India is also a sell?

A: Alstom India is one of those highfliers which have completely failed and disappointed. It’s a same story as CESC. It tried to rally, the rallies have failed. It is making a similar bearish head and shoulder pattern at the low end of its trading range.

If it breaks and the sense is that it’s going to break then we are looking at lower levels. This market is getting divide in two parts; stocks that are going to underperform, no matter what the Nifty does and stocks that are outperforming.

Q: Your list of outperformed includes Bata India as well?

A: We had Bata last week also and it’s been rallying and an explanation then was that a small dip is a correction, which is exactly what happened; it’s in uncharted territory, lifetime new highs, buy it. This is not the end of this run, its going to go much higher.

Q: What about Wipro ?

A: Wipro is certainly not at new highs, but it has made a bullish pattern, broken out and its peers in the IT sector are doing well. It is playing catch-up and it could easily do far better than the others in the short-term. Wipro is a buying opportunity. Any softness in prices intraday or for a couple of days should be used to go long.

Q: You are again selling United Spirits ?

A: Yes. It didn’t work out earlier. It is suddenly suggesting an intermediate top is forming. It is not yet sure, it’s a small pattern, but it’s on the bearish side. If this works out then there is a downside. If it doesn’t then traders must use a stop loss. One cannot sell such stocks which have doubled. It is very risky unless one is well managed in terms of risk.

Q: Why do you have a buy on HDFC Bank ?

A: It is much less riskier buy. The banks are on the verge of a breakout whether it comes out today on 17th, I wouldn’t know but the trade here is to go long. HDFC Bank is on the verge of making these news highs for this uptrend. This is a good bank to be in. HDFC is also a good stock to buy, every time it corrects or dips as it did yesterday.

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