In the background of weak global markets, Sudarshan Sukhani of s2analytics.com would look for an opportunity to go short. According to him, around 5,300 would be an opportune level to start buying.
The Sensex gained momentum for the third consecutive session on Tuesday. It rose 119.27 points or 0.68%, to close at 17,597.42. Meanwhile, the NSE benchmark was up 40.60 points at 5,358.50.
In the background of weak global markets, Sudarshan Sukhani of s2analytics.com would look for an opportunity to go short. “We will take a short position and ride it, if it goes down. We will also be prepared for an intraday reversal on the long side,” he advises.
According to him, around 5,300 would be an opportune level to start buying.
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Below is the edited transcript of the interview with CNBC-TV18's Mitali Mukherjee and Sonia Shenoy. Also watch the accompanying video.
Q: How would you approach the Nifty today?
A: After three days of rallies and on the background of weak international markets, today’s approach is to be a little open. If the markets begin with a slide, as it seems likely. We’ll try to look for an opportunity to go short and see how much lower this market can be taken.
So for today, the view is that we’ll take a short position and ride it if it continues down. We will also be prepared for an intraday reversal on the long side, on the upside. So essentially it is possible we start with a short and see whether that short gets converted into a buy.
Q: What would be an opportune level to start buying into a dip in the markets even for an intraday trader?
A: Somewhere around 5300 for the Nifty. That would be the point at which we will be alert for the markets to start reversing. The reason we are taking short position is simply that we want to find out whether this market is willing to be bought into at support levels or is it going to go down because there is downside pressure but that we will know only when we come to those numbers. So we will take a position and if its going to find support we will simply exit. That is why I have an open mind.
Q: Yesterday autos were quite sluggish. This morning you have a sell call on TVS Motor?
A: Yes. One must remember that these one day rallies are just that – ‘one day rallies’. TVS Motor rallied for a day but we have to see the context of that rally. It was falling for almost 40 trading days and then it moved up one day 5-7%, so that’s nothing. It has again resumed its decline, the down trend in TVS Motor is intact. I suspect that is going to make new lows. It is one of the weakest stocks in that sector, it should be sold into.
Q: You have sell call on Opto Circuits, the stock dipped quite a bit of dip yesterday?
A: Yes, Opto Circuits has seen a very handsome rally. My sense is that at this point we don’t know whether we are going to see a deep correction or that rally itself is over, which is something we’ll find out later. But in either case lower prices are in the offing. So Opto Circuits is a sell call since today’s view itself is that the markets are mixed they could actually go down more than I anticipate which we will just find out. So it is worthwhile examining the sell calls and taking them also.
Opto is one of the relatively weaker stocks and we have seen the way it fell on back of news. So there is reasonable ground to expect that it's not one of the big high flyers anyway.
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