Sudarshan Sukhani of Technical Trends sees 4,400 Nifty as the breakout point and 4,250 as the breakdown point. He advises investors to stay away today. “We still remain inside that trading range and it is one of those terrible days in a year when you just do nothing.”

Also see: Mkts to fall irrespective of what budget delivers: IL&FS

Here is a verbatim transcript of the exclusive interview with Sudarshan Sukhani on CNBC-TV18. Also see the accompanying video.

Q: How is trade looking to you? If we do get a bit of a soft start on the Nifty, how would you approach it?

A: The charts are very different from the news event coming in. The Nifty has now been in a trading range for 12 trading days which is roughly two-and-a-half weeks. It has done nothing at all. Everyday the trade range is getting compressed which means we now are looking at 4,400 as the breakout point and 4,250 ‑ very close by ‑ as the breakdown point.

If I were to make a call as a chartist, I would have said that the Nifty is likely to breakdown from 4,250 and give us a big decline. But the problem here is that there is a news event coming on Monday and neither I nor anyone else can make a call on how that event will affect the market. Today is not a good day. We are inside that range. If we come out of that range either ways, there is trade possible. But just 30 points down on the Nifty in the beginning is not a reason to go short. We still remain inside that trading range and its one of those terrible days in a year when you just do nothing.

Q: Taken a look at the oil charts of ONGC and GAIL yesterday?

A: Yes, there were some minor gains in ONGC and GAIL without the implications of price rise and a more liberal government. Even without that, the charts are good for investors. I don’t think there are any trading opportunities there. But if you look at the other two marketing charts, they have fallen. For instance, HPCL has fallen from Rs 400 to Rs 300. Already these marketing companies are not buying opportunities but GAIL and ONGC in either case is a buy.

Q: Have you taken a look at any of this power related stocks like Power Finance Corporation or Power Grid or even Rural Electrification Corporation?

A: I track Power Grid. My sense is that a lot of these stocks are very bearish on the charts. They are making a pattern which in general would define as a topping pattern. If the Nifty were to crack, power would crack large. Big cracks would come in that sector. I am not so upbeat on power, only separate infrastructure stocks are better looking on the charts. A lot of the other companies, sectors are giving impressions that they are ready for big declines, if the Nifty were to give a lead.

Q: Have you taken a look at Hindustan Construction’s chart?

A: Yes. It is one of the better charts which means it is not making the topping pattern that I was talking about in most stocks. This applies to GMR Infrastructure also. Maybe infrastructure will outperform, but will be relative. If anyone wants to go long, that is a sector where intra-day traders as well as position traders should focus on.

Q: Chart check on ONGC?

A: ONGC is a better chart. It doesn’t have those topping formation and will outperform even in the declining market.

Q: What about sugar?

A: I think sugar is now showing signs of some big exertion. It takes time to fall, but I would not be long in any of them. 

Q: If we do open 30-40 points down, can you initiate a trade at 4,300 Nifty or is it better left alone?

A: Left alone as you have been seeing. For the last two days, the markets have been going 100 points up and 100 points down in an hour. A very brave person would venture in today’s market.

Q: So neither long nor short?

A: Absolutely, unless there is a breakdown or a breakout.

Q: Below 4,250 you are saying?

A: That’s right or 4,400. Anything is possible.