SENSEX NIFTY
Feb 21, 2013, 10.27 AM IST | Source: CNBC-TV18

Sell on rallies; mkt may sink to 5500-5600: Sukhani

Technical analyst, Sudarshan Sukhani, s2analytics.com said that it is not just the weak global context; it is also the fact that our market is already in a downtrend. The market appears to be heading lower.

Technical analyst, Sudarshan Sukhani, s2analytics.com said that it is not just the weak global context; it is also the fact that our market is already in a downtrend. The market appears to be heading lower.

Further Sukhani said that we are going to have a correction of the entire up move that started from 4,500 and went to 6,120-6,130.

"Today is another down day, the chances are we will go down and try to test support. This support may hold because the Budget is coming by or it may not hold and we may simply crack it," he said in an interview to CNBC-TV18.

Q: We have got a slightly weak global context today, how would you approach the Nifty?

A: It is not just the weak global context, it is also the fact that our market is already in a downtrend. The market appears to be heading lower, we are going to have a correction of the entire up move that started from 4,500 and went to 6,120-6,130. That is a 500-600 correction that should be expected in this market, which brings us to a level of 5,500-5,600 eventually. This won't come about in a day, it won't even come about in a stream of declining days so that it comes and gets over with. It won't happen like that. It will happen in a very choppy way, market will go up and they will quite often come down and eventually they will go lower than they go up. It is not going to be easy.

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This is the background in which all analysis is being done now. Today is another down day, the chances are we will go down and try to test support. This support may hold because the Budget is coming by or it may not hold and we may simply crack it. However the bigger trade is on the downside. So, yesterday the idea was to sell, today the idea is to sell again on rallies or even on a breakdown of the morning range.

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Q: Bata India has been popping up on your sell list for sometime.

A: Yes and it has been coming down. These are the signs that blue chip stocks, stocks that double, triple themselves are now going through deep corrections. That is just one of the many indicators that suggest that we are in a strong downtrend. Bata made a small narrow range triangle and it has broken down from it that tells us that the current levels are just midway in an ongoing down move. That could give an eventual position trading target much lower than we can image for Bata. However, for the short-term trader it is a short sell and see, what other stocks like Jubilant Foodworks , Titan Industries are doing. They are all going down so it has very good company on the downside. I would be a seller in it, every rally is a sell.

Q: Where is Tata Steel headed eventually?

A: It is very disappointing because Tata Steel’s final frontier is Rs 350-360 and I do not think that that is going to hold. It has been falling relentlessly. It had a two-three day rally and the idea was to sell into that rally. That is over with. It is now breaking. It is at Rs 378. It is on the verge of going into a freefall. It is very disturbing. That is a longer term view. In the shorter term, Tata Steel is a sell today. Yesterday’s breakdown should see lot of momentum on the down side. All metals are very weak. 

Disclosure: I have no holdings or interest in the stocks discussed.

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