Sell on rallies; short Sesa Goa, HUL, IDFC: Sukhani

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Sell on rallies; short Sesa Goa, HUL, IDFC: Sukhani

Sudarshan Sukhani of s2analytics.com feels that if Nifty witnesses a relief rally today it would find support at around 4,950 levels. In such a case, he feels that one should sell on rally.

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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 Sesa Goa See messages about Sesa Goa

Globally, the reactions to the European Union (EU) summit outcome have been positive and Nifty is also expected to react to it today.

Sudarshan Sukhani of s2analytics.com feels that if Nifty witnesses a relief rally today it would find significant resistance at around 4,950 levels.

Today, even if Nifty opens 25-30 points higher than its previous close, Sukhani feels that the market remains sell on rallies and one should look at shorting opportunities. "The trend for the market is down. The bias is on sell, he explained.

Stocks like Sesa Goa , HUL and IDFC look technically weak to Sukhani and he has a sell call on them. However, he suggests that one could buy Stride Arcolab , Nava Bharat Ventures and Jindal Saw today.

Below is the edited transcript of Sukhani's interview with CNBC-TV18. Also watch the accompanying video.

Q: If we do see a relief bump up till what level will it last you think?

A: A relief rally should face significant resistance at 4,950. If it goes up every level will offer resistance, 5000, 5050, we could just 50 points at every level generally. It is not going to be an easy task for the markets to be pushed up.

Q: Even if we start 25-30 points higher this morning your bias will be the same as last week, to look at shorting opportunities now rather than long opportunities?

A: Yes, because the trend is down, so we are going to see up days. It is not as if the market goes down everyday or up everyday but the bias will not change. The market is a sell on rallies, there is no rush there is a positional trade and intra day trade should be taken patiently but the view is completely clear.

Q: There has been some brokerage sell call on Sesa Goa; technically alsodo  you think it's weak?

A: Technically it's very weak. We had this rally from 5,100- 5,200 and Sesa Goa did not participate, so relative strength was weak even going up.  Now on the downside, it is going to be a sort of leading indicator of the decline.

It is a pity because I remember Sesa Goa at Rs 400 and we were all upbeat but that is the way the markets behave. An immediate target on the downside is available at Rs 165, that was the previous low but I suspect even Rs 165 should not hold eventually.

Q: You have a sell on a favourite stock of yours HUL today?

A: Yes and the reason is that it is a favourite and its long-term play on the long side but all stocks will correct. HUL is giving almost clear signs that at Rs 400 it has exhausted and doesn't have the potential to go up. So there is a correction on the downside.

But the correction on the downside in a falling bear environment is a tradable opportunity, so it is a sell. HUL will come down eventually to Rs 330-340 from where it can begin another rally that gives us a lot of margin on the downside. HUL is a sell now, it's not just for today, but for some time.

Q: You have a buy call on Strides Acrolab today, tell us where would you place the stop loss?

A: Strides has seen a very strong upmove and now it is in a trading range. In side the trading range we expect this to move up irrespective of what the market does. A stop loss should be at Rs 410. We should have an ambitious target of Rs 450 plus.

Q: The other sell on your list is IDFC?

A: Yes, it is the same story as Sesa Goa, when the market went up IDFC refused to participate. I think that entire space did not participate but IDFC has been a very big disappointment and is ready to move on the downside.

At Rs 100 it has some support and that could be an initial target for a short seller. But the chances are that that support will not hold and once it breaks there is flood on the downside. Some of these stocks will go up much lower than we imagine.

Q: You have a buy on Nava Bharat Ventures, what is your view on it?

A: I am a little shaky on buying Nifty or largecap stocks only a few are likely to go up, most will either be choppy or down. So, it is better to look at some midcaps. Nava Bharat Ventures was in a trading range at Rs 195 and it broke out of that range on Friday when the broad market went down.

That is a good sign. Apparently it's beginning a new upmove of its own. I think as a midcap, one could take a day trade today hoping for follow through, or one could even build up position on it

Q: You have a buy on Jindal Saw as well?

A: Jindal Saw is more of a hope trade rather than a chart trade. When the stock fell dramatically at Rs 105-108 it is not rallying a bit. Jindal stocks can do unusual things, if this rally holds then we can see virtually straight line advance in the stock, it's worth taking a trade. The important point is we have stop losses, one can keep a stop of Rs 125 and the stock did not decline in the last 7 days; it is in a trading range.