See support for Nifty at 4,150: Sudarshan Sukhani

Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Downtrend will continue in DLF: Sukhani Don't buy banking stocks: Sukhani Buy Cairn on dips, says Sukhani Exit Tata Steel below Rs 600: Sukhani Bear mkt rally over, see a downtrend: Sudarshan Sukhani ALSO READ See previous views by Sudarshan Sukhani See what other Experts & Brokerages are saying about Essar Oil See messages about Essar Oil Nifty BSE | NSE 29/05/12 Are Mutual Funds betting on Nifty? Other Stocks in this news Reliance Petroleum | Polaris Financial Technology | Bata India | Gujarat Heavy Chemicals | Hindustan Construction Company | GMR Infrastructure | GVK Power & Infrastructure | SRF | Ranbaxy Laboratories | Bongaigaon Refineries and Petrochemicals | Bharat Petroleum Corporation | Hotel Leela Venture | Indian Hotels Company | Tata Steel | JSW Steel | Jindal Stainless | Jindal Saw | Steel Authority of India |

Sudarshan Sukhani of Technical Trends  feels that the intermediate trend remains up. According to him, the low of 4,150 for the Nifty stilll holds.

He advises traders to buy on dips. He said that he was looking for strategy rather than targets as targets were confusing.

He feels that we are in a bear market and might see a rally in it.

Excerpts from CNBC-TV18's exclusive interview with Sudarshan Sukhani:

Q: Technically though in the near-term what's your call are we going back above 4,500 or still uncertain?

A: The intermediate trend remains up. On Friday we tried to go down but there was a lot of support. So there is a low that was made at 4,150 and that low holds. We have seen a pattern of higher highs, higher lows and that is what an intermediate trend should show therefore. So far as the intermediate trend is up I am not going to make a call and say 4,600 will be crossed or we will reach 5,000.

But traders have to be on the side of the trend, which means in this case they should be looking to buy on dips. If the buying fails they should step aside. So rather than think about targets I am only thinking about strategy because targets are very confusing. This is a bear market and this could easily be a rally in a bear market and it may not be.

Q: Crude is exactly at USD 120/bbl. What is the chart saying there because that is very important for the stock market as well?

A: Yes it is, and it is a very significant support level. If USD 120/bbl breaks then the next support is around USD 108/bbl. So, there is downside in crude. If this support breaks, I am assuming that should help the index.

Q: What about oil charts? Stocks like Reliance Petroleum Ltd (RPL) and Essar Oil specifically?

A: Essar Oil has gone up a lot for whatever reason. RPL remains subdued and I do not think at this point RPL is showing any signs of life on the upside. Essar Oil is a stock that has made a wide range. Wait for a dip, it has broken out from a period of consolidation. So if one understands the company, the charts are saying that there is a buying opportunity on any dip.

Q: Couple of chart checks among the ones that were flying around yesterday Polaris , Bata , and GHCL . Which one do you track among these?

A: I like Bata and it has been in a wide trading range for almost two months and that's a decent base for a stock to build up. The stock broke out and that suggests that probably the worst is over. Whenever Bata finally decides to do its things, I think it will give us a good uptrend. It is a stock that investors should look at and traders should be looking to trade in it.

Q: Any thoughts on the charts of the infrastructure companies like Hindustan Construction , GMR or even GVK Power ? 

A: I track HCC and like many other stocks for example the entire steel sector - these stocks are now building some kind of a small base. I think that's fair because the Nifty is also doing that.

HCC is building a base and it is on the verge of an upside breakout. So even if this is a bear market rally there is money to be made on the long side in this stock. I am assuming the other infrastructure stocks maybe doing the same.

Q: Can you initiate a trade at 4,390 or would you want a better price point if the call is to initiate a long?

A: It is possible to initiate a long position at current levels. There is a very clear stoploss at 4,350-4,360. If long positions are opened and if that stoploss can be maintained then that is the way to trade because it is possible for the markets to slowly creep up throughout the day. That is what they have done for the last two days.

An aggressive trader could also take a short position if 4,360-4,350 level breaks down. But that would be against the intermediate trend. But it is possible.

Q: What are your thoughts on SRF? It has suddenly jumped up 7% this morning to Rs 150 now?

A: SRF has been a good buying opportunity for investors. The stock made a range between Rs 100-125. It broke out of that range and that gives us a message that this is now beginning its own bull market. So I think people should track this stock, buy it on dips, and they will see much higher levels ahead.

Q: Have you taken a look at the charts of Ranbaxy ?

A: Ranbaxy has been volatile in the last few weeks. It has fallen to Rs 400 as well. So on the charts there is no sense of where it is going to stop or whether at all the bull run is justified at this point because it broke support levels just 20 days ago. So for me I would say that if somebody wants to try for that 10%, then that is a different matter. But on the charts there is no buying opportunity in this stock.

Q: What do you see on the charts of some of these downstream oil companies Bongaigaon and BPCL ?

A: There is nothing in BPCL's charts. It is a volatile stock; it goes up, and comes down. I wouldn't touch it. There is no sense of direction either.

Bongaigaon has done some very good things. If you understand that business then this is a stock that should be bought on dips. There are much more ambitious targets there on the charts.

Q: What about the hotel pack? Are there any signs of a base formation there after their big falls, for example Hotel Leela?

A: Yes, there are some signs. These signs are evident in almost all the charts because the Nifty is also giving those signs. So, whether it is Hotel Leela or Indian Hotels there is a sense that the worst may be over. But the sector underperforms the other sectors. So, I don't think you should be buying or trading in it now.

Q: What leaps out from the screen to you in steel? Which ones have shown you the best chart formations?

A: The entire steel sector looks good. You can take Tata Steel out of that lot because Tata Steel has already done its bit. We now have JSW , Jindal Stainless , Jindal Saw and SAIL . All of them are making the same kind of bullish pattern and are on the verge of either breaking out, or have already broken out. So, that sector looks the best as of now.

Disclosures:

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