See Nifty below 4000 soon: Sudarshan Sukhani

Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty?

Sudarshan Sukhani of Technical Trends sees the Nifty heading below 4,000, but was quick to add that after four dismal days, the Nifty is ready for a relief rally.

Also see: Equities to see huge volatility in near-term: Newedge Group

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

Q: Do you think the Nifty heads to 4,000 or sub 4,000 levels or do you expect a few weeks of stability like we saw yesterday?

A: The Nifty is heading sub 4,000 and I don't have any confusion in my mind on that, but we have seen four rather dismal days for the bulls at least and the Nifty is ready for a relief rally.

If Infosys results are a resounding message to the bulls then we are ready for a rally and that result will cause the relief rally. If not we will see a tepid upmove and then the downtrend is going to resume.

Q: Couple of stocks that suffered in trade yesterday, especially real estate counters like Unitech?

A: They have done their bit. They have rallied 4-5 times from their lows. They are now back into their downtrends. All of them have broken out from those bearish patterns which we have been talking about in the S&P 500 ‑ the bearish head and shoulder that we have seen in the Nifty. These are leading the decline, I don't see them stopping.

So, even if we want to buy real estate, we have to wait for the Nifty to stop falling and consolidate because they are under performers. They are only good candidates for selling.

Q: Education stocks technically had a big fall post budget but yesterday many of them rallied back especially Educomp, NIIT, Aptech. How do the charts look there?

A: I think Educomp is extremely overbought. The stock can remain overbought for a long period of time but that is not a good reason to buy it. But NIIT and Aptech are both better investment and buying opportunities. Stocks which go up reasonably well, and then correct, they are much better for the long-term and for traders. You just have to wait for the Nifty correction to end and then look for buying here.

Q: Ashok Leyland and IndusInd Bank?

A: Indus Ind bank has done very well for itself in the last two days but the banking sector as such promises to have significant declines from current levels. All of them are on the verge of breaking support. So, it's difficult for to say if IndusInd Bank will out perform by moving up but perhaps it can consolidate, perhaps it can correct a bit less.  It is certainly an out performer in the sector.

Ashok Leyland is not a very good stock to own because it belongs to the auto sector where again the same distribution patterns are available. So, I would stay away from that one.

Q: What about Gammon and ITC?

A: I do not track Gammon. I think in construction, HCC and Nagarjuna Construction are giving the same story. They are breaking down but they are outperforming. So, perhaps they might not even meet their lower targets. That is the only good point about that sector.

ITC has been in a trading range, I do not remember for how many years and the same is with Unilever. It goes up raises hopes. I do not see the fast moving consumer goods (FMCG) sector actually pushing for making headway into a new uptrend and leading it. Till ITC does not break out of its 10-year consolidation I would be saying sell on a rally and buy on a dip.

Q: Before the markets open what do you think would be hit first-4200 or 4000?

A: It could be 4000, but I may be wrong completely.