Sell short-term positions if Nifty goes below 5330: Sukhani

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Sell short-term positions if Nifty goes below 5330: Sukhani

Technical analyst Sudarshan Sukhani, s2analytics.com believes, the ideal Nifty strategy traders could opt for today would be, to take buy if Nifty breaks out above 5,430 levels. One can sell short-term positions, if it goes below 5,330 levels, he added.

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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 BGR Energy See messages about BGR Energy

Technical analyst Sudarshan Sukhani, s2analytics.com believes, the ideal Nifty strategy traders could opt for today would be, to take buy if Nifty breaks out above 5,430 levels. One can sell short-term positions, if it goes below 5,330 levels, he added.

BGR Energy , Zee Entertainment , Alstom Power and ITC are on his buy list today. Meanwhile, Sukhani has a sell call on Adani Enterprises , Adani Power and Aurobindo Pharma .

Below is the edited transcript of Sukhani's interview with CNBC-Tv18. Also watch the accompanying video.

Q: Can you share a word on the Nifty strategy for traders even on an intraday basis?

A: The Nifty strategies are not easy because we are in a trading range and trading ranges are best avoided. So, the ideal strategy would be to take buy if the Nifty breaks out above 5,430 and go short or close your short-term positions below 5,330. This 100 point range is not going to give much.

Q: BGR Energy is on your buy list, can you tell us why?

A: BGR Energy fell all the way to Rs 170-175 and since then it has been consistently rally. Then it had a three week trading range out of which it has just broken out. It is like the Nifty breaking out above the levels we talked about, but BGR has already done that. That's a good sign.

That suggests that the uptrend we saw was not just a bear market rally, it is probably a reversal. Yesterday, it made those new highs in this current bull trend, breaks out of a trading range, does all the right things for a buying opportunity.

Q: What about Zee?

A: Zee is now doing the most appropriate way that a stock should be bought into. It rallied then corrected for five days. That is a dip. So, this is a classic example of a buy on dip. That dip is over. We have seen two days of small gains. It is reasonable to assume that the recent highs at Rs 135 will be taken out and Zee will cross them.

Q: Adani Power has been underperforming, but you have got a sell on Adani Enterprises today?

A: Both of them are doing the same things. They are both underperforming. Adani Enterprises made a classical chart pattern, a double top and broke down below it. It was a slightly better candidate for going and selling, although you could go and short both of them.

Adani Enterprises is now in a downtrend confirming a bearish pattern and looking at a target that is at least 10-15% lower. Eventually, it should come down to Rs 330 or Rs 320.

Q: How about Aurobindo Pharma on that as well you have got a short today?

A: Auro Pharma was bit of a disappointment, because I thought maybe this big bear market in Auro Pharma is getting over. But for now it seems that it faced lot of resistance at the Rs 120 level and that resistance is holding.

Momentum has turned down. The short-term trend has turned down. So, the signs are that the rally may or may not have been the reversal of the bear trend, if not Auro Pharma is going to go into dip trouble. We will find out that at least for now there is a short trade here. It is also a positional short.  

Q: Why are you are buying ITC from FMCG?

A: ITC did nothing when the market went up. It was at Rs 200 in November, then Nifty dipped all the way to 4,500 and ITC is trading in that trading range. It is still in that trading range. So it's going to do something good or something bad, I don't know which side.

I am assuming eventually ITC will breakout on the upside. For the last three days it's been trading in a very narrow range. A narrow range is normally a precursor to a big move up or down. Since we are in an uptrend ITC could easily move up on the upside. This is a trade that is being taken in anticipation.

Q: What about Alstom Power?

A: Alstom has done all the right things. Earlier also it came in our buy list. It's building an excellent base. After the big bear market it's going through that base building process and I think now for the last six days just like the Nifty it's in a small trading range.

But while it could take its time, it is likely that individual stocks will take a decision to continue their up move and Alstom is one of those stocks that looks ready to breakout of this trading range today, maybe tomorrow. So, long positions are justified and even if they don't workout today it is worth waiting for the eminent breakout.

Disclosure: I have no personal holding in any of the stocks discussed.