See short-term mkt resistance at 2900: Sudarshan Sukhani

Sudarshan Sukhani of Technical Trends said the markets moved in a narrow range yesterday, although they were volatile intraday. He said the market is facing short-term resistance around 2900 levels.
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Dec 15, 2008, 09.31 AM | Source: CNBC-TV18

See short-term mkt resistance at 2900: Sudarshan Sukhani

Sudarshan Sukhani of Technical Trends said the markets moved in a narrow range yesterday, although they were volatile intraday. He said the market is facing short-term resistance around 2900 levels.

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See short-term mkt resistance at 2900: Sudarshan Sukhani

Sudarshan Sukhani of Technical Trends said the markets moved in a narrow range yesterday, although they were volatile intraday. He said the market is facing short-term resistance around 2900 levels.

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Sudarshan Sukhani, Technical Trends
Sudarshan Sukhani of Technical Trends said the markets moved in a narrow range yesterday, although they were volatile intraday. He said the market is facing short-term resistance around 2900 levels.

Sukahni advises short-term traders to take profits on their long positions. "Short-term traders should definitely keep out of the market today."

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

Q: What is your view of what happened yesterday because after that very big rally we had day before yesterday, yesterday was a mixed kind of a day but held on at the end?

 

A: The markets moved in a very narrow range yesterday although they were volatile intraday. That range tells us that the markets are facing significant resistance around 2,900 levels, even though we closed at the highs that is not relevant.

 

Given the international cues and the fact that in any case we were approaching a short-term resistance, short-term traders would be well advised to take profits on their long positions. For positions traders it becomes a difficult decision to make because we could simply correct for a day or two and then renew the advance, so that is little more difficult to say but short-term traders should definitely be out of the market today.

 

Q: So, if we got a bit of a gap down start how would you approach the Nifty?

 

A: The trend is still up and the intermediate trend remains up. So, the approach should ideally be buy on dips, but I donít think we are going to get a buying opportunity today. Therefore, an aggressive trader will go short at the very open or on a rally and take up profit if there is a reasonable decline.

 

Q: At what point does that intermediate uptrend gets changed around and you start looking at shorting opportunities on the Nifty?

 

A: The intermediate uptrend, to my reckoning, changes if the Nifty were to close below 2,800. That would tell us the midpoint of the trading range. It is going to fail now that is the message the market will give us if it closes below that number. Going short is another issue because we are already 3,500 points below the highs of the bull market, so from here how much more downside is possible is a question mark.

 

Q: If you do get a gap down you would look to accumulate on the market or do you think, considering so much news flow, it might be a good idea to sit out the first hour or so?

 

A: I donít think today is a day for buying, so either an investor sits out or identifies a location where aggressive traders can go short. There is a worry here. For the last 15 days, the markets have consistently ignored the bad news and went up even when the unemployment figures were bad. So many other things happened. However, today the markets are responding to bad news that again tells us that may be the rally was a bear rally which is coming to an end.

 

Q: How would you react to the fact that while we had a sharp cut, we seem to be holding on these levels?

 

A: There is a support at 2,800, and we can easily hold on to that number. However, there is no opportunity for trading today, because the uncertainty is higher.

 

Disclosure: I have delta neutral positions in Nifty and investments in shares.

 

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