Upside may cap at Nifty 4760; book profits: Sukhani

Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Nifty has strong resistance above 4550-4590: Nirmal Bang Trade long in Nifty above 4550 levels: Karvy Nifty likely to witness range of 4620-4450: Bhambwani ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

Technical Analyst Sudarshan Sukhani said for the markets the most reachable target would be about 4,760 to 4700. According to him, markets were becoming fairly over-bought in the short term and so rallies should be used to take profits rather than enter.

Here is a verbatim transcript of the exclusive interview with Sudarshan Sukhani on CNBC-TV18. Also watch the accompanying video.

Q: For the markets what is the most immediate reachable target for someone who has got a long on the Nifty?

A: For the markets the most reachable target would be about 4700 to 4760. That is a good 200 points from where we are now. But I must tell you that this journey of 200 points will be much more difficult as compared to the 600 point rally that we have seen. My sense is that markets are now becoming fairly over bought in the short term. We are talking about the short term momentum now, so rallies should be used to take profits rather than enter. That would be the broad idea. Individual stocks will perform differently but generally the Nifty and most of its components are now likely to face heavy weather as they keep on going up.

Q: Two stocks from yesterday from the real estate space - DLF and HDIL?

A: DLF has rallied a lot and surprisingly on relatively poor or inferior chart patterns. HDIL is a much better stock to trade in, the momentum tells us that maybe higher levels. Unitech has excellent patterns for the momentum trader on the long side so avoid DLF, go for the others.

Q: Does Punj Lloyd chart suggest it can rise even higher from here?

A: Yes it can. In fact the entire infrastructure space Punj Lloyd , HCC , GMR Infra these whole thing suggest that whatever the rally the Nifty does is going to be accompanied by big moves in infrastructure and construction. So Punj Lloyd is a momentum play currently.

Q: How would you trade now: at 4550, would you start taking some profits because the market is likely to run into resistances as you said or do you just keep riding because there still could be a 100-150 points with a stop loss?

A: I think we have to ride this strength. The market is going to face heavy weather on the higher sides but if you are a position trader you cannot call a top. So you have to say okay - 4450 is my stop loss and let me see how much more this market can give me. For the short term trader there is no sense in trying to time the market and go short. I would not advice any shorting strategies, wait for those inevitable intraday dips and then buy. For a short-term trader 4510 is a reasonable support level for today.

Q: How are the telecoms looking technically to you - Idea and Bharti ?

A: Bharti is not looking good. Yesterday I felt that it could breakout from Rs 850 and then begin. It is in a trading range for two months now, but that did not come about. So if it could not do that yesterday then it is just going to move inside that range 20 points up and sometimes go back and pull in. So this is no longer a buying opportunity.

Idea is a little more volatile stock. It has moved up then gone through a steep correction. I think for momentum traders there is money to be made, buying Idea on dips and also for investors to take a position in that stock.