Stay out, trading before Fed verdict not good idea: Sukhani

In an interview to CNBC-TV18, Sudarshan Sukhani, s2analytics.com shared his reading and outlook on market and specific stocks.

Also Read: Taper countdown begins; will Nifty's upmove continue? Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: Will it be another range day for the Nifty, again another day when you won’t trade the index but the stocks? A: That is what we have a sense of. The market is waiting for news. It is never a good idea to trade before the news because unless one has a direct input into Bernanke’s mind, there is no way of predicting what the news will be. Traders stay away. It is not just a narrow range. It is also in front of news, we do not venture in. Tomorrow would probably a good trading day, the market will decide on a trend before September 20. Therefore, a trend should emerge tomorrow and traders should enter. Till then wherever the stocks are giving some signals, take them. Q: How would you trade Bharat Forge today?
A: Bharat Forge has completed its bear market and now it is going on a strong uptrend. At some point this uptrend will pause but this is not the point. After making good gains yesterday, it is coming out of a small trading range which suggests that more momentum and more upside is there. It is a nice stock to be in and especially when index stocks should be avoided, the midcap range is the best place to trade in. Q: You have a buy on Yes Bank?
A: Yes, we have. Yes Bank is giving same bullish pattern that public sector undertaking (PSU) banks have already started giving. The market is likely to go up because banks are bottoming out; at least the chart patterns are upbeat. All this can go wrong tomorrow then it can go wrong on Friday, September 20. So, that is a different issue. If I were to just look at charts then I would have said that today is a day to buy. In front of news this becomes a problem, but Yes Bank individually can be bought and one can also buy equity if one does not want to go into futures. There is a trade on the long side and it is a positional trade, not just a day trade.    Q: Why do you like Godrej Industries and what are the levels for the stock?
A: Godrej Industries had a V-shaped rally and V-shaped rallies are not usually tradable and we always have choice among stocks; we have 20 stocks and two of them give a V-shaped rally so we ignore them because we cannot catch them. You do not know when the V turns.
However, there was a big down day in Godrej Industries yesterday. If this rally is genuine then the chances are that today or tomorrow the rally will resume. It is difficult to time whether it will do this today or tomorrow but it is worth entering into because this vertical rally cannot abruptly end. It’s a short-term trade because there will probably a deeper correction but for momentum players, yesterday's dip is a buying opportunity. Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed.
_PAGEBREAK_ Q: Is there more steam in Tata Motors (DVR)?
A: I think so and differential voting rights (DVR) is outperforming the basic Tata Motors' equity price. There was a small decline in both of them. The DVR had the decline much more pronounced. That was a bullish flag; it is coming out of a bullish flag and suggesting that significantly higher levels are ahead. I would be upbeat on both these stocks or even if one wants to buy Tata Motors, it's roughly the same. The sense is that they are now again racing towards lifetime new highs. Q: You have a sell call on United Phosphorous for the day?
A: United Phosphorous is a very choppy chart while the stock seems to have bottomed out. It is giving a sense that it goes up and comes down and because bottoming out process takes a long time the choppy conditions can be used for short-term trades; the keyword here is short-term. United Phosphorous is currently breaking down from a trading range. There is some downside here. So, somebody who is looking at a quick trade then it is worth taking; sell Futures, put a stop loss and get out at a small modest target.  Q: You have a sell on Siemens as well?
A: Siemens has been a disappointment and we have been consistently suggesting going short in it and that is working out all the time. It has become half of what it was and yesterday’s small rally in Siemens exhausted itself, the decline started yesterday. I suspect it is going to continue and it is something that does its own thing without interference from the Nifty. So, when we are confused on the Nifty, it is a good stock to be in, go short here. Q: 5,872 on the index, you have been telling us about how this is a no trade zone ahead of the big event but what should the order of the day be, anything on the Nifty that you would do?
A: If the news events were not there we would be mildly bullish but in front of news events I do not think there is anything that we need to do. It is always wiser to trade after the event and the event is tomorrow, it is not on September 20. Therefore, it’s just one more day of being little easy. Q: Any trade in either ITC or Hindustan Unilever (HUL) this morning?
A: The point is that if the Nifty is not tradable then the heavyweights are not tradable either. There is a mildly bullish bias but a trader needs to understand and decide whether he want to be in any position before the news event. However, that is a different issue but I would prefer to stay with the midcaps.