Market may rally next week; buy blue-chips: Sukhani

Coming week is most crucial for market because of the Union Budget. Market ended last week on a slightly negative note. Both Nifty and Sensex, were down about half a percent apiece.

Also read: Wall St Week Ahead: Investors face another Washington deadline Sudarshan Sukhani of s2analytics.com expects the downtrend of market to continue but with sporadic rallies. Sukhani adds he would be buyer purely for short-term trade. However, he cautions that buying should be done only in blue-chips like Reliance Industries, Bharti Airtel, Hindustan Unilever, Infosys, Wipro, Sun Pharmaceutical Industries and there is no need to dabble in midcap stocks. As a Futures and Options strategy he recommends buying 5600 Puts for March expiry. Giving stock specific ideas for next week, he recommends buying Parsvnath Developers. As short selling idea, he recommends Century Textiles and Colgate Palmolive (India). Below is the verbatim transcript of his interview on CNBC-TV18 Q: Technically, as a trader how would you approach the next week? A: As a trader, firstly I would be taking light positions, ahead of the big news event volumes should be reduced but that is a question of tactics. I would be willing to go and buy in this market purely as a short-term trade for next week, nothing more than that. My view is that we are in a downtrend and this downtrend will continue till we reach much lower levels. However, within that downtrend, we will see rallies and next week could see one such rally, so I would be a buyer. Again buying should be done only in the blue-chips like Reliance Industries, Bharti Airtel, Hindustan Unilever, Infosys, Wipro, Sun Pharmaceutical Industries. There is no need to dabble in midcap stocks unless you know what you are doing. Q: Do you have any trading strategy in the derivatives market because last week we did see quite a bit of action there. There was selling of index Futures that we saw, there was buying of lower level Puts as well. In the run up to expiry, any derivatives strategy that you would recommend? A: No strategy for expiry but for a slightly more intermediate term I recommended buying 5900 Puts for March expiry. The opportunity to buy these Puts will come sometime during the next week when market will rally and they will. It is very unlikely that market will keep on falling. That is the time when you will get the Puts at a lower price and the overall trend is down so that would be a very good trading idea. Q: Just give us two of your stock specific ideas for next week if you can? A: I would be a buyer in Infosys. There is a small cap stock that we used to track much earlier that is Parsvnath Developers. The stock has now come out of a very large trading range and it suggests an investment or a position trade buying. However, short selling is also important in this market and that would be Century Textiles and Colgate Palmolive (India), both for selling.