Nifty to be rangebound; short sell below 5800: Sukhani

Technical analyst Sudarshan Sukhani of s2analytics.com expects the Nifty to be rangebound and volatile.

Since 5,800 has worked out as very strong support for the Nifty, one could short sell below that, he suggested. If the Nifty manages to close above 5,970-5,980 then it would signal that the market is moving upwards. See rangebound session for another quarter: Amit Dalal Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: Which way you want to trade today on index? A: The view on the Nifty is difficult to ascertain. We all understand that the market is choppy and that is the definition we have given. That choppiness itself exhibits in so many different ways. Sometimes it goes down, on one day it goes up. As we saw yesterday it did both, went down and went up. We cannot do anything about a choppy market. That is the nature of the market that after big trends a lot of sideways movement takes place and that is my view on the Nifty. I would expect the Nifty to be rangebound and not only be range bound also cause a lot of confusion by being completely random in its movements and volatile also. It is far wiser to stay and accept this and soon this period will also go away. However, we have some markers - 5,800 has worked out as very strong support for the Nifty. So, short selling is ideally suggested below 5,800. On the higher side a close above 5,970-5,980 will suggest that the market is moving up higher, a close not just an intraday foray. Therefore, within this trading range we probably look to take only day trades. However, beyond this I would be a buyer or a seller below 5,800. Q: You have been negative on Cairn India for a while; you continue to short sell it? A: Cairn India has been a short sell for sometime now. It went choppy and then it was going up and down almost simultaneously. Eventually it gave us a clear directional view. That directional view persists. Cairn is looking towards Rs 250-260 in that area, not exactly. That is a larger view. However, today Cairn is a short sell. Even in a rising market we will see stocks that go down and I expect Cairn to be one of them. It has just broken down from a small trading range and is likely to move down further in the short-term. India strategy, top 22 stock ideas: Prabhudas Lilladher Q: You have been bullish on Shriram Transport Finance Corporation in the past, you think the charts are turning? A: Yes, it is a sell now. Shriram Transport Finance Corporation has been a favorite but for the last month or so it is slowly sliding. That slide seems to have taken the clear pattern of lower highs and lower lows. Yesterday while the whole market was rallying, Shriram Transport actually fell. That itself shows poor relative strength. I think there is a theme here that a lot of the stocks, midcaps stocks are unable now to reach their earlier highs. Shriram Transport looks probably ripe for much more downside. For a short-term intraday trader, consider going short. Keep the context in mind. There is no need to go short till the Nifty shows some kind of rally and strength. However, once some stalling is seen in Nifty then the short positions are justified. Disclosure: I have no holdings in the stocks discussed. _PAGEBREAK_ Q: You are long on Dr Reddy's Laboratories this morning? A: Yes. This is one of our better stocks for the day and by better I mean it is a high conviction trade. Dr Reddy's Lab seems to have done all the right things. It fell and went through a deep correction. A small rally not a V-shaped rally. That rally has lead to a consolidation, a bullish head and shoulder pattern is also visible on the charts. So, we are looking at a base building exercise that's eventually leading to a breakout on the upside. Its peer Sun Pharmaceutical Industries has done very well. I would not be surprised if DRL finally plays catch up. Therefore, this is a positional trade. It is also a trade that one wants to do intraday for the day because any small move in the Nifty could see big gains in this one. Q: How would you trade Jaiprakash Associates? A: I am buying Jaiprakash Associates and it has come earlier also. A few days ago it came in our buy list for the first time after many weeks. The stock has fallen. The decline has been stemmed, a small base is now ready, a double bottom has now been confirmed so Jaiprakash Associates, on the charts, is doing all the right things  to suggest that the rally could be coming. Stocks have to be taken in context. The rally will come only if the Nifty is choppy or actually begins an upmove. That is something we cannot help. However, in either of the two cases, JP Associates should be an outperformer. I would be a buyer here. There have been small price bars that suggest that a big expansion on the upside could be imminent. Q: Do you think Reliance Industries could be good for more? A: Yes, I would be a buyer in Reliance and the reason is that yesterday we saw a big rally, intraday rally in the Nifty and the intraday rally was actually primarily led by the blue chips. The midcaps were behind. That should continue because in a choppy market the midcaps sometimes get forgotten. One should still focus on individual stocks but among them in the largecap, RIL probably is very appropriate candidate for buying. The stock has gone through a small correction. That correction is over. It was a three-four days sideways range and that range is breaking on the upside. For technical traders, there is a bullish divergence in the stocks. All said and done we should be looking at higher levels. RIL is probably going to be an outperformer in this market throughout 2013. Q: Would you say the same for Tata Consultancy Services (TCS)? A: A buy list cannot be complete without an IT stock. Sometimes it is Wipro and HCL Technologies and today I would suggest buying TCS. TCS had a small mild correction and that was a sideways movement. This one does not come down dramatically. That correction seems to be getting over and it is quite easily possible that the stock is ready to make lifetime new highs again. The trend has been undisturbed in TCS. All it does is to stop the trend for a few days, pause and then resume. One day this will end but today is not the day. The chances are that we will see more gains here. Therefore, consider buying TCS. Q: How would you trade Bank Nifty? A: A sharp rally in the Bank Nifty yesterday and it outperformed the Nifty, first on the downside and then on the upside. But that's it. We have big bank event coming, the rate coming on March 19. So, banks are going to be very volatile and there is no way of predicting what will happen. If we leave aside the event, the banks are going to continue and underperform the broad market. A rallying the Bank Nifty should be sold once sign of weakness is seen. In fact the Bank Nifty will probably be an easier sell as compared to the Nifty. So, the levels for Bank Nifty would be, the first target of 11,700 has already been touched on the downside; one should look for resistance somewhere in the 12,500 area and if that resistance holds, consider going short again. The Bank Nifty is probably likely to lead any decline earlier than the Nifty. _PAGEBREAK_ Q: Would you buy Ranbaxy Laboratories? A: Ranbaxy is a buying opportunity. I think traders should be looking at it for two reasons. First, the stock is now maybe bottoming out. The short-term pattern suggests that a momentum driven rally could be beginning and second because its other peers DRL, Cipla, Sun Pharma are all doing well and some of the sheen may rub-off on this also. So, in either case the charts justify buying in Ranbaxy. Q: What about Maruti Suzuki India after the correction. What would you do there? A: Maruti has seen a sharp correction. That correction at least temporarily may be over. If that is so then for a day or two days -- and we are now talking very short-term, for a very short-term period Maruti justifies going as a long side trade, which means one consider buying it. If it is not working out, one has a stop loss or one can exit even before the stop loss. The stop loss is not designed to be waited upon. If the momentum turns, if the market sense is not positive, not comfortable, one do not have to wait for the stops to be triggered, just get out and protect capital. However, with this caveat, it is possible and it is probably a good idea to consider a long position in Maruti. Q: How about Power Finance Corporation (PFC) after yesterday 4 percent rally? A: Power Finance Corporation saw a big rally yesterday with all other bank related, finance related stocks that rally came about. However, the chart position has not changed. It may change. PFC could become a buying opportunity but at this point it is a sell and the key here is that one does not have to sell it. One can just step aside and see if PFC finally decides to break on the upside or renews its downtrend. Therefore, if one were to make a call on it then the call would be that one should be selling it. Q: You are not as bullish on Dena Bank though? A: Dena bank is a sell. One day does not make a change of trend. This stock has been falling relentlessly; there are mild weak rallies and strong declines. So, one has to assume the pattern is intact unless proved otherwise. Therefore, Dena Bank needs to be sold into a rally. We have news event coming for banks so traders can think for themselves should they at all trade in a banking stock, but if one want to then that’s the trade, go short. Q: What about Reliance Communications, which has corrected such a lot. Could you put in a short-term buy here? A: Yes, Reliance Communications is actually a short-term buy. It has been in a choppy market for the last five-seven days. That choppiness has finally led to a breakout yesterday because of news or whatever. It is not news alone, if the technical do not support the news become irrelevant. So, technical are supporting a rally. Yes, after yesterday's breakout I would not suggest going head long into it, wait patiently for intraday consolidations or dips and then consider buying. But it is a buy. It is not a long-term buy. We are only talking of a couple of days of a rally or three days. That is all.