See very strong rally in October: Sudarshan Sukhani

He further says the market is expected to decide its direction now. "So far, this is a small correction. Traders should be positioned to buy this correction today. They should keep a stop loss assuming that this may not work out," he adds.

Also read: Market to stay choppy, pick & choose; bet on CIL, M&M, say experts

Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Sonia Shenoy.

Q: How would you approach today’s trading session?

A: It has been volatile and choppy, but that was expected after a very big move. Yesterday was worrying because the market closed at the lows of the day, after a gap down.

Today, the market is expected to tell us where it is going, one way or the other. The SGX suggests that the lows were just random occurrence. If the market will go up then we will assume this was a mild correction.

The other scenario is that the market continues to drift down today, sometime during the day. If that happens then we start worrying about the validity of the uptrend itself. So, today or on Monday, we will know exactly where we stand.

So far, this is a small correction. Traders should now be positioned to buy this correction today. They should keep a stop loss assuming that this may not work out, but it could. The trade, so far, is short-term traders go long, keep a tight stop loss and be prepared to get stopped out. Position traders maintain your positions till today evening. Your stop for today is 5,450, but that will change.

Q: You have sell on Divi's Lab from pharmaceutical space?

A: FMCG and pharma is now giving the impression of turning around and going into an intermediate correction. Divi's Lab has actually made a bearish pattern and confirmed it yesterday. This is not surprising because after all even the best of stocks will correct, will pause, consolidate, will move down.

So, this is not a bear market for Divi's Lab but for a short-term trader, there is opportunity on the downside and unless something spectacular happens to the Nifty on the upside today. Unless that doesn’t happen, these short trades should work out nicely.

Q: You are bearish of Sterlite as well?

A: Sterlite is a horrible chart. It is almost similar to the one Tata Steel had. It gaped up and then gaped down creating some kind of an island at the top, that’s fairly bearish. No matter what this market does, metals are going to underperform.

Sterlite, for today, is a short selling idea. If the markets remain choppy, it could actually be carried over for the next week too.

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