Upside momentum weakening; buy dips close to 5000: Sukhani

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Sudarshan Sukhani of s2analytics.com tells CNBC-TV18 that the upside momentum for the market is weakening, so traders should look at going long during dips. "Buy on intra day dips closer to 5000," he advised.

He goes on to say that the safer picks in the current market scenario are leaders, which will lead any market rally, like Infosys, and some midcap names.

However, if the market were to close below 5000 today, Sukhani says he will not carry forward his positions.

Below is an edited transcript of his interview with Udayan Mukherjee and Sonia Shenoy. Also watch the accompanying video.

Q: What is your view on the Nifty and what you're expecting to see today?

A: Inspite of the fact that yesterday was disappointing again for the bulls, the market remains in a short-term uptrend. So the wise trade here is to go with momentum. There is no doubt that upside momentum is weakening with every set back, but it is up.

So my view remains that traders should be looking to buy on an intra day dip, somewhere closer to 5000, but we can't actually define when.

Q: Yesterday you were telling us about the possibility or potential of CNX IT trade, but this morning you are going with Infosys ?

A: I am going with Infosys rather with the broad indices simply because it is easier to trade the leaders currently. Infosys remains a buy. We have seen how IT has out performed the broad market, so if the market rallies today, Infosys should be a leader. So it's a very interesting idea; go with the leaders on the long side.

Q: You have got buy on Century Textiles also today?

A: What is happening that the Nifty's slightly uncertain outlook means that heavy weights and blue chips are now not in the buy list. But a lot of midcaps are offering interesting possibilities, so Century qualifies. It has gone through a very deep correction and shows signs of a basing pattern. That basing pattern will be successful only if the market holds, which we will find out.

If the market even gives us the slightest inclination to go up, I think Century Textiles is now ready for a very decent upmove. High beta stocks go up much more, so Century is a buy with a modest target of Rs 295.

Q: You are not happy with pharmaceuticals; you would sell Sun Pharma today?

A: Pharma is in a bull market, so clearly selling pharma has to be defined. What seems to be happening now is that after a very sharp run up, pharma stocks have begun a deep correction.

We are selling to take advantage of that correction, but the profits are likely to be limited. We need to be nimble because the primary trend for Pharma is up, but within that professional traders can take advantage of these downside moves. This is in any stock, not just Sun Pharma. Sun Pharma gives a target of Rs 485, and  it could be lower

Q: Same story with Cipla as well?

A: Same story with Cipla, although Sun Pharma's trend is far more mature. Cipla could be a relative out performer in the medium-term, but as of now pharma stocks are suggesting they are ripe for a correction, they have started one so Cipla is a short sell.

Q: You are choosing to buy Bharat Electronics today?

A: A lot of these midcap stocks are now making those trading ranges and inching upward. So Bharat Electronics has made a trading range and has broken out of it. That is okay because the Nifty also made a range at 4900 and broke out, so most stocks will mimic the broad market.

But BEL has broken out and is staying above its support level now, so there seems to be no reason to think that it cannot go up. The only joker in this entire buy list is Nifty itself. But if we are looking for individual stocks, BEL is a buy and Rs 1560 is a possible short-term target.

Read on to find out what the trade should be before the EU summit...