Play the expiry long, suggest Sukhani

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Play the expiry long, suggest Sukhani

Sudharshan Sukhani of s2analytics spoke to CNBC-TV18 about his expectations of the market.

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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 Shree Renuka See messages about Shree Renuka

Q: If we do start around 5,150, can you keep adding longs and would you move your stop loss higher as well with it?

A: I will not move my stop loss higher because the markets are prone to a sudden and sharp correction. There is no sense in getting stopped out in that. So the risk is intact. But my stop losses will remain at 5,050. Will I add to long positions. The basic premise still remains. Wait for first 10-15 minutes of choppiness to be over and then add to long positions. This also means that those who do not have long positions can simply begin and initiate new ones. This is a breakout trade. We had a previous pivot high at 5,100. The markets have taken that out. These breakouts are always high risk, because if this is the top, then we are buying at the top, but we never know that. So the trade is on the long side and if the market says okay, I am willing to go higher, then trader should be willing to add to positions.

Q: It's been a lot about the banks. How does something like Canara Bank look on your charts?

A: In the remarkable rally that we are seeing, almost everything looks good and that applies to Canara Bank too. The stock has rallied from Rs 370-470 in just 10 days. Bank Nifty or lot of these midcap PSUs have outperformed. While I would still favour the large cap private banks and the smaller private banks over PSUs, Canara Bank is a buying opportunity. For banks there is a caveat. Some of them have run-up so much that it's almost inevitable that they will take a breather. There could be a consolidation also. So please be careful when you go for individual banks.

Q: How about something like IDFC ?

A: IDFC is a better chart in the sense that it's still possible to buy it now even after the run-ups that we have seen. It's possible we can see a target of Rs 135-140 and it's been a relative underperformer and it can play catch up.

Q: Staying with financials, Yes Bank ?

A: Yes Bank is a better opportunity. It fell and I thought it will go below Rs 200, but it did not. That's the market's wisdom for us. But it does appear that the worst is over for private sector banks and Yes Bank's previous highs were almost Rs 400. So if this rally gains momentum, private sector banks will significantly outperform. Even for today, Yes Bank could surprise because of a lot of dynamics in the F&O sector window there. But I think it could surprise on the upside.

Q: What about United Spirits which has looked quite weak since result despite a rising market?

A: Yes, it keeps on coming in my sell list in the morning and that still remains. There is no sense in trying to catch a stock that was darling of yesteryears, but it's now out of favour and then we still stick to it. I don't think there is any purpose in it. United Spirits for reasons that I don't know is in a bear market of its own. As you said, it keeps falling even in this remarkable rally. It's a short-sell. Even if the markets go up, the chances are, this one is going down. It's going down to test Rs 400 again.

Q: What about JSW Energy after yesterday's 11% move?

A: There is more in it because it's fallen a lot. A lot of these midcaps, say fair quality midcaps, at least we know the promoters, a lot of these midcaps are going to go flying if this market goes towards 5,700-5,800. That's what the targets are. JSW Energy is a buying opportunity. There is no rush to buy it today because F&O expiry will do strange things to it. But keep it in your list, tomorrow or next week.

Q: Finally a stock from the infrastructure space- IRB Infra ?

A: IRB is a better opportunity. It's probably a better position trade than just a day trade. But on either account, whether you are a position trader, whether you want to take a swing trade or a one day trade, IRB is well positioned to give small gains on the upside. Eventually, a position trader should make more because if this market goes up, we will see a lot of gaps. So maintaining a position will give more money now than doing simply day trades.