Market likely to see relief rally anytime, says Sukhani

Technical analyst, Sudarshan Sukhani, s2analytics.com said that the index is in a downtrend and the trend does not change. He does not think that the downtrend is going to be modified. Therefore, he is looking at lower levels and 5,800-5,780 is the first support, this support will eventually give way to even lower levels.

"We are probably going through a correction of that entire bull market from 4,500-6,100. That requires a very decent correction at the very minimum," he said in an interview to CNBC-TV18.   Below is the verbatim transcript Q: How you are approaching the index this morning? A: The index is in a downtrend and the trend does not change. News events will come and go. I do not think that the downtrend is going to be modified. We are looking at lower levels and 5,800-5,780 is the first support. This support will eventually give way to even lower levels. We are probably going through a correction of that entire bull market from 4,500-6,100. That requires a very decent correction at the very minimum. So, the trend is clear and within this trend we are almost oversold or there is no such thing as oversold really. Also Read: Centrum Wealth picks Karur Vysya, Citi Union Bk as winners However, for whatever it is worth, the market has fallen and midcaps have fallen and there is nothing to sell now. The selling will come, I assume only if there is a consolidation or if there is a small rally. You need something to sell into. That is the only redeeming feature of this entire market that we could expect a relief rally to come about anytime. That would be a relief rally, maybe tradable, maybe not; the trend is visibly down. Q: What is your view on Allahabad Bank? A: Allahabad Bank is a buying opportunity not because it has suddenly done something very nice but mainly because it has fallen so much and then stopped falling for the last four-five days. As I just explained that the sell setups have vanished. They have vanished because everything has been sold into. There are no consolidations now, no rallies, no breakdowns; all of this has happened and occurred. So, maybe the chances are that we will get this sharp sudden rally on the upside. It will be perhaps tradable. If that happens Allahabad Bank is well suited for a buying opportunity. Traders need to watch the market and then go for these long positions, they could be worthwhile. India good bet but don't expect blockbuster year: HSBC Q: You are comfortable buying NMDC for the near term? A: NMDC is a far better chart as compared to many other. The decline in NMDC is stemming. It is making a small base at the lower end and the fact that it has already fallen so much suggests that the base may eventually work out well. Base building is a choppy exercise but that does not matter. We are only looking at some side of the trade, buying on dips and then exiting on a rally. So, perhaps the choppiness will also not affect us. NMDC probably is one of the better ideas to go long on all dips. Disclosure: I have no holdings in the stocks discussed. _PAGEBREAK_ Q: You are selling Dabur India today? A: Dabur is in a trading range and it has reached the top of its trading range. So, whatever happens to the broad market up or down, the chances are that Dabur will slide to the lower end. That is a selling opportunity and as market consolidates, we will get more of these opportunities. The important point is it is unlikely that Dabur is going up. Therefore, it is relatively safe. Buy Puts or sell Calls or sell Futures. Q: You are buying Hindustan Unilever? A: Hindustan Unilever is giving the first sign that perhaps the worst is over for it. It is bottoming out, may not eventually work out and may go down if the Nifty goes further or in the next leg of the decline for the Nifty. However, at this point of time it is worth buying into because there is some kind of base, some kind of support levels that are visible on the charts. So, buying will come in stocks that we can anticipate now. I am just trying to visualise where sudden spurts can occur. Hindustan Unilever seems to be well suited for that. Q: You have a sell call on Indian Hotels Company? A: Indian Hotels is a sell call. It broke down on Friday. It has been doing that. It then broke from a significant support level at Rs 61-62 and any stock that is now breaking down suggests that there is more downside coming irrespective of the market becoming choppy or consolidating or doing something else. There will be stocks that are now beginning new legs of the downtrend; unfortunately Indian Hotels seems to be one of them. It is a positional trade also. If it is working, carry the position. Lower levels are coming. Q: You have a buy on Adani Ports and Special Economic Zone? A: Adani Ports is one of the very few stocks in the Futures and Options (F&O) segment that has a rising moving average, higher highs, higher lows. The market understands something that we do not. We need to follow the market. Here is a stock that is going up. It remains in an uptrend in what is quite visibly a disastrous market for midcaps. Therefore, Adani Ports is a buying opportunity. On Friday it gave the first signs that a new upmove may be coming. I think this should be watched carefully today and tomorrow. Q: How you would approach the index intraday? A: I have explained that the positional view is that we are looking at lower levels. However, intraday changes will always take place and the market seems to be getting ready for some kind of a bounce. The first resistance, if this bounce does occur, would be at 5,925. Therefore, I would assume that on a day to day basis today I am looking to see if I can buy the Nifty for a short, quick day trade. _PAGEBREAK_ Q: I am tossing some pullback candidates to you, Indiabulls Real Estate. A: It pulled back on Friday but I would still be a seller in it because unfortunately it has broken down from a visible distribution pattern. So, any rallies that we see are relief rallies. We just need to be patient for these rallies to exhaust themselves and sell it.     Q: What about Manappuram Finance? A: Manappuram has come down to Rs 36 where it has strong support. It is not a day trade. However, as a positional trader at this strong support level I would be a buyer in it. Q: There was some recovery on sugar faces like Shree Renuka Sugars, how would you trade that? A: These recoveries are one day recoveries. They just look dramatic because suddenly these are 3-4-5 percent so they come on everybody's screen. That means nothing. One has to see the context. Sugar stocks have been tumbling day after day. Any rally in Shree Renuka must be sold into, not necessarily today but when one gets a sense that the rally is getting over. Q: How would you trade Cairn India now? A: I was a big fan of Cairn but it has broken down from a distribution pattern, a very bearish pattern. The pattern targets are Rs 260. I do not know if Cairn is going to go to Rs 260. However, I do know that at every opportunity including now Cairn is a short sell. You see a small rally and I would be saying sell it. Q: How much more would you give Reliance Communications in its pullback? A: There is some more upside. It came down to very strong support levels, Rs 64-65. It bounced from there on Friday. That was a good bounce. So, may be Rs 75, may be Rs 80 also. Q: Your thoughts on Lanco Infratech? A: It is another one that has cracked. It is difficult for me to determine a downside target because that target could become negative. That would not happen. However, the view is clear that it needs to be sold into. There is nothing in it. Any rally is a selling opportunity.