Market looks ready for short-term bounce: Sukhani

Technical analyst, Sudarshan Sukhani, s2analytics.com expects to see a volatile session today.

"The problem is that individually largecap stocks are not giving signs of selling. Therefore, I would go with the view that at some point this market is ready for a short-term bounce. That does not change the trend at all, but as short-term trader, my bias is to buy," he said in an interview to CNBC-TV18. Big market moves likely next week; bet on RIL: Experts Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: Usually a volatile kind of session, the expiry. How are you approaching it today for the index? A: Yes, it is usually volatile and today it is likely to be much more volatile because the background for this month has been rather difficult and we are in bear market or a downtrend. The approach is twofold; the first is that position trades on the short side are already available; I hope traders have it and they should maintain it. We are in a downtrend and that should follow-through in April so there is no need to touch that. The second is short-term trading; short-term trading is much more difficult this week and for the last two days this market is making a swing low and likely to give a bounce of some kind. That has not worked although fortunately market has not dropped either, the Nifty particularly. We are still in 5,630-5,650 range. The problem is that individually largecap stocks, index stocks are not giving us signs of selling. Therefore, I would go with the view that at some point this market is ready for a short-term bounce. That does not change the trend at all, but as short-term trader my bias is to buy. So, a dip today is a buying opportunity and ideally I would like to buy Calls, 5,600 Calls for March. That is for day trade. They will expire today and for April, carrying it to next week. I am not looking to go short on a day-to-day basis till the market rally. Market momentum broken by political concerns: Nilesh Shah Q: You have a sell on Yes Bank for the day. What is the rational there? A: Yes Bank is a part of private sector group, which is starting its bear market. There is much more downside; big distribution patterns, head and shoulder confirmation. I explained that a lot of stocks are giving buying signals rather than selling. However, Yes Bank is not doing that; a small four day rally was a bearish flag and on Tuesday it broke down from that flag. That suggests much more downside is coming. Technically there is nothing to suggest, at least a short-term low has been made. Therefore, it is one of the stocks that could be safely sold with a stop loss even if the market is choppy. Q: NMDC will be the latest Nifty entrant; you have a buy on that today? A: Yes, I have a buy and all the buying that we are going to talk about will be some kind of catching falling knives buying because market has been falling and this is probably a time when one should start buying. However, it is not in an uptrend. NMDC has declined, stopped at Rs 132 on earlier low, making some kind of a double bottom. For two days now, we are seeing some rallies in-between and we have indicators, which are now suggesting deeply oversold position and rising. Therefore, we think there is no sell signal. This is a buy signal for all practical purposes. Let us buy it; in this market that is the best we can do. Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed. _PAGEBREAK_ Q: You have a buy on Idea Cellular? A: Yes. Idea is a less sharp knife. Idea came to Rs 106. That is a correction. Rs 106 was earlier support and it is holding on to that. It is an outperformer. It is certainly better than banks, better than so many other stocks. When compared with the Nifty, Idea is doing much better. Therefore, at Rs 106 with strong support coming and the possibility of another double bottom here also at a much higher level, I would be sanguine buying Idea today for a couple of days and even for day trade.   Q: Financial Technologies is a short trade for the day? A: That is a short trade today and that continues going down. We have been tracking this and have been saying to sell it. For last four days Financial Technologies is in a narrow range; it is drifting down and the range is narrow. My sense is that the narrow range is followed by an expansion and because of the trend in Financial Technologies that expansion will again be on the downside. Therefore, traders should position themselves on the short side, wait patiently, a big expansion should come and especially with Futures and Options (F&O) expiry and fun and games that could come today. If it comes, take profits, do not overstay. Q: You have a buy on HDFC Bank today? A: Yes. After having explained that I am very bearish on private sector banks even I am surprised that HDFC Bank is in my buy list and the reason is simple; HDFC is doing exactly what NMDC was doing. It has made some kind of a double bottom; the indicators are suggesting a deeply oversold position. Therefore, we are anticipating a bounce. That does not change the overall bearish structure of these banks. However, for short-term traders a bounce could be attractive on the upside and among the private sector banks HDFC has the best chart to go long into. One could sell the Bank Nifty and buy HDFC Bank and both trades could work out. Q: You have a buy call on Gujarat State Petronet (GSPL)? A: Gujarat State Petronet is a midcap stock in a bear market. It is a falling knife trade and that is warning because this could go either ways. However, the problem is that all charts are suggesting that the trades are coming on the long side and very few on the short side. GSPL made a double bottom, a big decline; indicators are oversold, suggesting a buy signal is coming. Take the trade. I do not think most of these trades will work out today, some of them will but if the market has abundance bearish momentum and if one carry these trades then perhaps next week they could work out. Q: Any trade you want to put in on the Nifty in the first couple of minutes given what we have seen in pre-opening? A: I would like to go long in the Nifty and not necessarily in the first couple of minutes because one has to give it a cooling off period. However, after the first five-ten minutes elapse, the trade is to go long. In the last two days the patterns that we are getting are all bullish. The market is not necessarily reacting to it but it does mean that we cannot short sell in the shorter timeframe, the day trades and the swing trades for a couple of days. All the trades are coming on the long side. Sell the Bank Nifty or avoid it and go long in the Nifty. _PAGEBREAK_ Q: GMR Infrastructure will be in focus because of the news flow. Technically how would you approach that? A: Technically I would have been a buyer, in fact GMR has come in our buy list earlier. However, I do not know how the market reacts to news so that is something separate. Q: Reliance Industries is also on your buy list today? A: Yes. There are two undercurrents. Reliance Industries has made a bearish pattern so on a long-term chart lower levels will be seen. However, the very fact that it broke a low on Tuesday suggests that at least in the short-term a bounce can come in and that will be a bear trap, it will be a trap for bears because these lows for largecaps are not broken so easily. Therefore, I would expect a rally and that rally should be bought into. Q: How would you trade Wipro? A: I would be a buyer in Wipro. The fact is that IT stocks are buying opportunity. If market gives a dip, we would like to go long in it. We are approaching earning season again. The charts do not suggest a mishap. Wipro has gone through a mild correction in a trading range that should breakout on the upside. Q: What kind of levels do you see on IFCI? A: It is my favourite shorting candidate. We will see Rs 23 and probably see much lower levels. Q: How would you trade Hindustan Unilever (HUL)? A: Hindustan Unilever is a buying opportunity. HUL has made a fairly bullish pattern -- I heard a brokerage downgrade -- it does not matter, market sometime does not care for these upgrades and downgrades. Price patterns are far more important. HUL is bottoming out. It has made a fairly bullish head and shoulder and it is now coming out of Rs 473-475 range when it goes into some kind of a bull market for itself, at least for sometime. Therefore, I would be upbeat on HUL, buy Calls for April and stay Put there. 
 
HDFC is another stock, which is giving same bullish pattern as HUL; a bottoming out pattern, a bullish head and shoulder and breaking out. That suggests that this index is not going to go down in a hurry, even the heavyweights are giving buying.     Q: Do you see NHPC on its way to become a penny stock soon? A: I do not see this. A lot of news has come there. I am assuming that smart money or at least some people have taken advantage of it. At Rs 19, NHPC has support. For me as a short-term trade, NHPC would be a buy expecting Rs 19 support to hold. If it does not, get out. However, I would not go for a penny stock scenario. Q: It is tough because of how volatile things are but as a positional trader how do you think the next series may shape up for the market, what kind of markers would you set for the index? A: I would expect a relief rally to start sooner or later. However, we are in some kind of a bear market. That relief rally should end by 5,800 Nifty and the chances are that by the time April ends; April will end lower than March. Therefore, we are only trading a possible rally but maintaining our positions for the downside.