No opportunity to go long for short-term: Sudarshan Sukhani

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No opportunity to go long for short-term: Sudarshan Sukhani

The trend has been on the downside, feels Sudarshan Sukhani of s2analytics.com. He believes the market has no opportunity to go long even for the short-term. "The positioning is very simple that we are in a bear market. All positional trades are being carried on the short side," he added.

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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 DLF See messages about DLF

The trend has been on the downside, feels Sudarshan Sukhani of s2analytics.com. He believes the market has no opportunity to go long even for the short-term. "The positioning is very simple that we are in a bear market. All positional trades are being carried on the short side," he added.

According to Sukhani, DLF is a perfect short candidate for the day trader and it can go much lower for the position traders. Bank of India from the banking space is ready to join the bear party, he feels.

If the market gives signs of any kind of rally of stability, then the IT stocks will continue to outperform and HCL Tech is well poised to take advantage of that up move, he pointed out.

Here is the edited transcript of his interview to CNBC-TV18. Also watch the accompanying videos.

Q: How are you positioned after all the damage for trading this week?

A: The trend has been on the downside. We have been talking about it for weeks, so that is not surprising. The positioning is very simple. We are in a bear market. The primary trend reasserted itself when we broke 5,200 levels four weeks ago. The trend has not changed since then. All positional trades are being carried on the short side. I don't see any need to cover them as well. I don't think there is any opportunity to go long even for the short-term.

Q: You have a sell on DLF this morning. How do the charts look?

A: DLF has outperformed the other real estate stock and this outperformance will end. The idea is to look for short selling opportunities in this market rather than trying to buy the falling knifes. DLF is a perfect short candidate for the day trader. For the position trader, it can go much lower.

Q: In the banking space, you have chosen to short Bank of India today. What is the reason for that?

A: Bank of India was in a trading range and it finally cracked that trading range. While it's a late entrant to this decline, it will go much faster than the others. Some times, random moves occurring individual stocks. They fall less, and then they start joining the party. Now, Bank of India is ready to join the bear party. This is a short trade. The other short trade is the Bank Nifty. When we look at individual stocks, Bank of India seems very appropriate.

Q: You would sell GMDC as well this morning. What is your view on this?

A: GMDC is not in a bear market. It's a correction. This correction can eventually lead to a bear market, but there is a short selling opportunity here. I always try to create a difference between stocks that are in consistent downtrends and stocks that will go into a correction because the targets are much narrower and chances of a snapback are more. GMCD needs to be traded with that caution, but a lot of deep corrections can occur. GMDC is a short sell now.

Q: IT has been the relative outperformer these last few days. Can HCL Technologies move against the market?

A: I think so. All the long calls have to be taken with a caveat that the market has to start giving signs of moving up. As much as 95 out of 100 stocks will move with the market on the downside. HCL Tech may not be the remaining five out of 100, but if the market gives signs of any kind of rally of stability, then IT stocks will continue to outperform and HCL Tech is well poised to take advantage of that up move.

Q: What would be your rationale for Ambuja Cements ?

A: To my surprise, Ambuja could move up even when the market goes down. It could notch up gains towards the end of the day. It's slightly different now. Like most of the cement stocks, Ambuja is also in an uptrend. There is an opportunity to go long. If you see a big gap down or a big down move in Ambuja, then you could put a stop and go long without waiting for the market to recover.

Q: BEML is also on your sell list?

A: BEML has become a favourite shorting candidate. The time is over when it could do no wrong and that time is over. Now, it cannot do anything right. The rallies have now fizzled out and a down move has begun again. Some of the other PSU stocks, which were giving signs of life, like REC and PFC have suddenly collapsed. Then, we realised that those consolidations were ongoing moves in a downtrend. This is the same thing happening with BEML, whose up move was also much weaker. BEML is a short selling candidate. I can see much more downside here.