Expect profitbooking at 5250; buy on dips: Sukhani

Sudarshan Sukhani of s2analytics.com, says that that the short term momentum is on the upside so he is taking long positions. Today, if there is any positive news development then he plans to go for profit booking at 5250 levels. He has a bullish bias today and he plans to buy more on dips.

Below is the edited transcript of his interview to CNBC-TV18. Q: How would you approach the Nifty? A: We have long positions and that’s going to continue because the short-term momentum is on the upside and it make sense to go with it. Today we have a bit news event. On my long positions I am considering taking profits in 5,250 area with the only exception is that if the market were to slice through that resistance and keep on going up because of some unexpectedly good news then that would be an exception otherwise we will exit at that target and then see the market behavior.  So, today is a bullish bias. Try to buy on dips. Q: From FMCG basket, you are going with ITC today? A: Yes and for two reasons; first, the momentum however weak or tepid is on the upside. Second ITC is on the verge of making lifetime new highs. It is at Rs 258. Once it crosses that it goes into unchartered territory. It is making a bullish pattern at these elevated levels. Although the valuations are high, the market likes it and the market is willing to push it much higher. ITC is a buying opportunity and if it breaks to Rs 258, then it’s not just for day traders but position traders might like to buy Calls or buy Futures or buy equity here. Q: How would you approach Ranbaxy Laboratories? A: Ranbaxy is a long idea. It is exactly the opposite of what ITC is doing. While ITC is on the verge of new highs what Ranbaxy did was that after repeated corrections it found support at the Rs 460-470 level and it is bouncing from that level. So maybe this is a deep correction that gets support at Rs 465 and if that is so, then a bounce can again take it to more than Rs 500. There is a certain amount of risk. If we are right, we are buying at lows in the Ranbaxy today. We could see a nice follow-through today itself. If we are wrong we have a stop loss. But it seems that given market conditions Ranbaxy is probably ripe for a rally.
Q: Power Grid Corporation of India is in your buy list today? A: Power Grid Corporation is a nice stock and has been moving steadily up. Although sometimes we find that these were good stocks to own only after they have done their bit. Yesterday we saw a sharp upsurge and that upsurge should take it higher. This is a stock that is making higher highs-higher lows, moving out from a base. I assume that the quality is good, so good pedigree. Yesterday’s gain should be build upon today and probably for the next few days. Q: You would sell Tata Communications? A: Yes I would sell Tata Communications. For the last seven days, it has now being stalling; the rally has almost fizzled away. Whatever we saw from Rs 220 to Rs 270 has been done with and now it is sliding on the downside. Tata Communications has been a dismal stock to own for 15-20 years. So, once it sees a rally the best trade here is to go short. It usually comes down. It is a nice shorting idea. Q: Do you remain cautious on the oil marketing names; do you think there is more downside here? A: There seems to be more downside in oil marketing companies (OMCs), these stocks have gone in a range. They should have broken out, run up but that has not happened. In case of Hindustan Petroleum Corporation (HPCL) which is the stock idea for today but essentially it is applies to all three of them. HPCL has now rallied it has now come in a minor down trend and it is quite possible that the minor downtrend could continue. There is some relation with Brent, with crude and with other news but the charts tell me there is downside here. _PAGEBREAK_ Q: You have a sell on Cummins India? A:  I have a sell on Cummins India because it has been a disappointing stock. It should have rallied with many of the capital goods or infrastructure stocks but it did not do so. It has been in a downtrend for almost three weeks. In this down trend, the markets have gone up but Cummins India did not. It moved up just for a day or even half a day. Again, yesterday when the broad market was roaring, Cummins was falling. So this is a stock we want to go short in and the reason why I have short ideas today is because unless something happens with the RBI policy, I don’t expect the Nifty to make big moves. So we will have long and short options both. Q: What would your approach be for Axis Bank this morning? A: I would be a buyer,  the only problem is that with every banking stock there is an event but if I were to ignore that, Axis Banks charts are very attractive. They are suggesting that a base building exercise is on and its on the verge of a breakout on the upside. Axis Bank and ICICI Bank are both are likely to be an out performers and doing far better than the Nifty. Q: What about Oriental Bank of Commerce (OBC) which was yesterday’s star? A: I would sell OBC, there is nothing to it. Yesterday star came on the back of a significant decline. OBC is where it was 10-15 years ago. I wouldn’t touch it at all. It continues to be a short sell, not necessarily today but whenever there is a rally and we get a sense that the rally is fizzling out maybe today or tomorrow, it needs to be sold into. Q: Lupin is at a new 52 week high, your view on that? A: It had come in our buy list earlier as well and it is at new 52 week highs. The pharma sector is roaring and we don’t worry about valuations and just say that Lupin is a buying opportunity for positional traders. It is not as much of a day trade. One needs to buy it and hold on to it for a few days to get the benefits out of this one. One must buy it. Q: What about a high beta stock like Housing Development and Infrastructure (HDIL) now? A: I would buy HDIL, it has gone through a deep correction. Market momentum though mild is on the upside. So until the market momentum doesn’t change HDIL should do better things, so I would be a buyer here and there is no confusion on that. Q: Your view on Jet Airways? A: It is a short sell and the rallies are to be sold into.   Disclosure: I have no personal holding in the stocks discussed