Trend is down, short Nifty now: Sudarshan Sukhani

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Trend is down, short Nifty now: Sudarshan Sukhani

The Indian market is haunted by global as well as domestic problems. Last week itself the Nifty lost over 5%, while the Sensex slipped 4.9%. Sudarshan Sukhani, technicaltrends.com says, the trade is on the short side now. According to him, the trend is down and the Nifty is unlikely to touch 5,150.

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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 IRB Infra See messages about IRB Infra IRB Infra BSE | NSE 29/05/12 Are Mutual Funds betting on IRB Infra? Other Stocks in this news JSW Steel | Financial Technologies | Max India | Pantaloon Retail | Apollo Tyres | Chambal Fertilisers and Chemicals | Shree Renuka Sugars | Sintex Industries | Arvind | IFCI |

The Indian market is haunted by global as well as domestic problems. Last week itself the Nifty lost over 5%, while the Sensex slipped 4.9%. Sudarshan Sukhani, technicaltrends.com says, the trade is on the short side now.

According to him, the trend is down and the Nifty is unlikely to touch 5,150.

In an interview to CNBC-TV18, Sukhani says, even if there is a pullback, a lot of selling will come around 5,020-5,040.

Also read: Market may see a mild pullback rally, says Udayan

Below is the edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee of CNBC-TV18. Also watch the accompanying videos.

Q: Would you still continue to trade short or is that trade looking a bit risky, given how much we fell last week?

A: The trade is on the short side. Ideally ofcourse if we have rallies then you can sell into a rally. That makes things much better and much safer with less risk. But the trend is down, there is no confusion on that. So, the direction is on the short side.

Q: The options activity suggests that people do not even expect a bounce to that stop loss level that you were speaking about last week - 5,150. In case of a pullback, do you think it will get terminated well before that?

A: The momentum suggests that 5,150 is unlikely to be touched. If we do see a pullback, the chances are that a lot of selling could come in around 5,020-5,040.

Q: What is your call on IRB Infra ?

A: IRB made a trading range and like most other infrastructure stocks gave the impression that maybe this is it and it was not it. It broke down from the trading range. It's now making new lows with regular intervals almost everyday.

At this point, at Rs 131, it has gone to test its earlier low. That low is unlikely to hold. So, we are seeing a sustained selling pressure in IRB after a major pattern breakdown. That tells us that lower levels are likely to come in. Today should be a continuation and follow up of Friday's selling.

Q: What about JSW Steel ?

A: I think it is just starting its decline. JSW Steel actually rallied quite significantly from Rs 500 to Rs 700 over the past few weeks. It was a relief rally in an ongoing bear market. That rally is over.

I think that this stock is now going to resume its decline with a vengeance. So, JSW Steel is an excellent short selling idea. Keep a stop loss because in individual stocks a lot of volatility can come in. I would suspect that atleast Rs 500 would again come in the stock.

Q: What about something like Financial Technologies ?

A: It has been in a bear market for long. It is actually falling everyday. For the last three days, it is in a trading range. When a market has a clearly defined trend, the trading range usually gets resolved on the side of the trend. The trend here is down. The trading range should get resolved and broken on the downside.

Patterns are pretty weak. I think we are going to see new lows here. At Rs 600, you really go and short sell. Your risk is very small, whatever stop loss you put or whatever I have suggested and then you look for significantly lower levels at the breach of Rs 600. So, it's a short sell without any doubt.