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

Sudharshan Sukhani of s2analytics spoke to CNBC-TV18 about his expectations of the market. Nifty is headed towards the close of a stellar expiry to the January series. 

Below is the edited transcript of his interview.

Q: A word on the index and whether it's still a good idea to play it long given that today is triple witching day as well?

A: It's a good idea. Yesterday, I explained we went long exactly at 5,100 that was the breakout level. While the conviction was not high, the markets will tell us what to do. The tops were 5,050 and those tops still remain. So even though the Nifty may open much higher, it doesn't matter. The trade is to remain long because that's a breakout trade. Breakout trades are high risk. But it's irrelevant and we have to accept that risk. What is the reward here? That's much more important. The reward is if this breakout is real and if it moves up, then we are looking at a target of 5,700-5,800. So at 5,175, which is what the SGX is saying, it's an excellent trade to go long for a positional trader because the targets could be 500 points or even 600 points higher from these elevated levels.

Q: You have chosen a lot of midcaps to buy today. Let's start with Renuka Sugar.

A: Yes and it's never been my favorite sector, but surprisingly there are so many charts which are suggesting buying opportunities. I have explained that earlier also, so many bottoming out patterns.
Renuka is now making a bullish head and shoulder pattern. The right shoulder is also, which in the non-technical language, is in a small trading range. If it breaks out of that trading range which it did yesterday, it's now looking at a significant upmove because the four-month bullish pattern is supporting that breakout. So it's looking at Rs 38. Once momentum picks up, these targets can easily be overshot.

Q: What about Jubilant Foodworks ?

A: I never thought I will get this stock in my buy list. I don't know whether it's overvalued, chances are it is, but momentum has its own method of working. It's now coming out again after three months bullish pattern. It's broken out. It's not actually broken out, but maybe it will breakout today. Yesterday's big move has put it on the verge of a breakout, so it's worth taking. We must remember that today a lot of unusual things could take place, but Jubilant as a positional trade suggests a target of maybe even Rs 1,000 that would be good.

Q: Idea was a big star yesterday, but conversely, do you think Bharti is a short today?

A: It's a short. The market momentum is clearly in favour of the bulls; there is no need to take any short positions. But if the markets weaken, Bharti is probably going to be one of the first to weaken. It didn't participate in this rally. It was a very minor uptrend while the Nifty was roaring ahead. Then it stopped almost exactly at Rs 360 where a significant resistance level comes in. So it's a short in the sense that please don't buy it. If the markets decide to reverse, this should be our first choice.

Q: This one we haven't talked about in a while. BEL also a sell today?

A: This is a sell in the real sense, irrespective of the markets too. The chances are it's going to go down. It's a disappointment. It rallied when BHEL and L&T rallied. So it was a capital goods rally for BEL. But while others maintained that rally and stayed up, BEL has been falling for the last four days. So clearly, that rally was just a sympathy rally rather than anything on the charts. There is nothing on the charts now. BEL is a short-sell. For all I know, while the whole market could go up, this one could come back to Rs 1,300. So it's certainly an avoid. Don't try to buy it as a falling knife. It's also a sell.

Q: Some more buy candidates- Aurobindo Pharma ?

A: Aurobindo Pharma fell on the back of news from Rs 200 to almost Rs 100, in fact Rs 72. Now whatever that problem was seems to be behind it. Share prices are saying okay. At the current lower levels, there is some buying interest. It's a falling knife trade because it doesn't have the patterns that the earlier ones had. But if this works out; it's just reviving after a brief correction; if this is the beginning of an up move then we are buying almost at the lows which is why I put it in this list. A lot of stocks will now offer buying opportunities, probably Auro Pharma is one of them.