Nifty may slip below 5100, but keep long positions: Sukhani

Technical analyst Sudarshan Sukhani of s2analytics.com expects Nifty to slip below 5,100 levels today. However, he hopes that long positions taken yesterday would be maintained since Nifty has a strong support at 5,100 level.

It was completely listless trade on Wednesday as Nifty remained in a narrow range due to lack of global and local cues. It gained 10.25 points to end 5,128.20. "At this point, having a short position especially at a strong support level is not something I am keen at. I am maintaining small volumes in my long positions," he elaborated. Below is the edited transcript of Sukhani’s interview with CNBC-TV18. Q: How would you approach the Nifty for the day? A: We went long yesterday and maintained that position. Today it’s quite likely that the Nifty could slide below 5,100. But, the long positions will be maintained and there are two reasons. First, we are at a very strong support level – that 5,100. Twenty points lower is quite possible, but it’s not easy to switch position just for 20 points here and there. The second reason is that there is a big event risk for bears. People who are short sellers face the prospect of some dramatic news coming out of Delhi and seeing 100 point gap up which goes terribly against them. That may not occur. If it doesn’t occur the bulls lose nothing. But if it does occur the bears will be in deep trouble. So, at this point having a short position especially at a strong support level is not something I am keen at. I am maintaining small volumes in my long positions and then will see where the market goes. Q: You are staying with shorts in PSU banks though, Bank of Baroda today? A: Because all the public sector undertaking (PSU) banks have cracked, they have shown terrible distribution patterns. There is a sense that the Bank Nifty will perform with the Nifty this time. It won’t outperform. In Bank Nifty it is possible that PSU banks will continue to move down if the market remains choppy. So Bank of Baroda is a short sell. Its not just Bank of Baroda but all are giving sense that there is more downside here. It is easy to sell Bank of Baroda this morning after first 10-15 minutes, put a tight stop loss and expect it to drift down further.  _PAGEBREAK_ Q: Lupin’s chart is looking good? A: Yes. Lupin also recorded a new high apart from solid set of numbers. New highs must be bought and also the pharmaceutical sector is outperforming. All of the big names in the pharmaceutical sector are giving bullish patterns, suggesting a breakout and yesterday Lupin did that. So there should be a follow-through here. Market are expected to open mildly lower but if Lupin is available at lower price then it a worthwhile buying opportunity, if not today then tomorrow by the time settlement comes in something good should come out for day traders.     Q: Tata Motors is headed down to Rs 200? A: I think so because I assumed Rs 230-240 is holding. But it did not hold. Once those levels are broken then one cannot challenge the wisdom of the market. The next support level is Rs 190. I do not know whether it will reach there but the trade is on the downside for the day and for the next couple of days and with Futures & Option (F&O) expiry the trend which exists gets increased. So Tata Motors remains a short sell. This could touch Rs 190 during August because market could remain quite choppy. Q: You have a sell on BF Utilities? A: BF Utilities had a rally and that rally seems to have fizzled out. It is not making new lows. It was in a narrow range for last two day. That narrow range can be resolved on the upside or the downside but the fact that it turned around from its highs and made big bars on the downside suggests that it’s going to move lower. There is a tight stop loss. I have noticed that when BF Utilities moves lower then it starts moving significantly. It makes big moves once it decides where to go. So it is worth taking a short position. Q: You are going long on Opto Circuits India? A: Yes. Opto Circuits India was always in my short list and as it fell I was comfortable selling it being on the short side. Now there is a sense that it’s bottoming out. It had a rally. That rally led to a correction and that was a correction. That was the first warning that the stock is probably bottoming out when it refused to make new lows. It is moving up again now. I am assuming that the rally will resume. The correction is over and it is a low risk trade. There are tight stops. If it works out these high beta names can do well on the upside. Q: You choose to buy Aditya Birla Nuvo (AB Nuvo) today? A: Yes. Aditya Birla Nuvo is a very disappointing name in the market. I have been upbeat on AB Nuvo and it has done nothing. I think for years it moved in Rs 700-800-900 range. Now after a correction AB Nuvo has started a rally again and if not anything it should reach Rs 900 where it faces resistance. So there is a basing pattern, there is a correction, lows have been maintained and new lows have not been made. I think there is a buying opportunity here.  Q: How would you approach something like Shree Renuka Sugars from the sugar space? A: I would be a buyer in Shree Renuka Sugars. It was in my buy list yesterday and it continues. Sugar stocks have gone through a correction and that is healthy for them and now it is on an upswing. So the trade here is to go long and an immediate target is Rs 37. A long-term target I had given earlier is Rs 40 and I hold that. Q: How much downside do you see on Reliance Communications from here on? A: Reliance Communications has collapsed and broken all kinds of support levels, so there is no number that I can put. The current decline should certainly see it coming to Rs 57-56. But it is difficult to take a longer-term view because it is in an un-chartered territory. The targets are actually Rs 35 but it is silly saying that.  _PAGEBREAK_ Q: What about Tata Global Beverage? A: It is a nice chart, it’s a low beta stock and one should have low expectations but it at least makes money for buyers. If you buy it on a dip, it makes money. At Rs 120 it’s breaking out again. So rather than rush into it, wait patiently for it to consolidate or even have minor intraday dips and go long. Q: What about chart of Titan Industries? A: Titan is making very bullish pattern although it is not yet confirmed. But I am assuming at least it will make an attempt to comfirm it and that brings it to Rs 238, which is a good 10-12-15 points above from where it is now. So there is trade on the long side at current levels. If it crosses Rs 238-240 mark, then it begins a significant upmove. So traders should be on the long side here from now on itself Q: In the last couple of months India Cements has been volatile but how would you approach it for the day? A: It should be a day trading call and for the day, I think we should be trying to go long. Yesterday it had a very decent session and we should expect some follow through today and we have already seen a correction. Q: Your view on Power Finance Corporation (PFC) from the non-banking financial companies (NBFCs)? A: NBFCs are out of favour currently but just because traders have to decide between buying and selling, it is a sell. But ideally, I would not go short in it, I would just be patient. Once the correction is over, for position traders that would be a buying opportunity. Q: Where is your stop loss on the long trade on the Nifty? A: It is 5050. Disclosure: I have no holdings in the stocks discussed.