Nifty target at 6000; short-term traders stay out: Sukhani

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

Also Read: Global cues supportive, will Nifty cross 5700 today? Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: What are the indices looking like today, good to go for more? A: The indices have rallied and that is almost a copybook because at 5,500 one must go long, there is a breakout here and the market chopped around and eventually is likely to give 300 point gain and that is a 30 percent gain in 10 or 15 days; it is something that traders can die for. This is the time to take profit. We have also reached a pattern target which we explained repeatedly; 5,750 to 5,800, we are going to be there in the morning and we could easily exceed it. However, for short-term traders, it is time to book profits and for positional traders nothing has changed, the next target is 6,000 and we could go there. Even if we do not go there, there should be signs of distribution, there will be a pause. So, there will be enough time to take profits and exit but for short-term traders there is no trade now, the trade is to take money and sit quiet, these opportunities will come again. Q: Is that the case for the Bank Nifty as well because that was the huge performer last week, up about 10 percent. If you made any money on the banking stocks, would you suggest taking profit taking there as well?
A: The Bank Nifty is likely to cross 10,000 in the morning; give or take few points doesn’t matter, but that is the target we set. Take profits in the Nifty, it is also exactly the same suggestion for the Bank Nifty. We can have too much of a good thing, we got the uptrend exactly correctly, rightly and we have seen a decent move. Now a lot of choppiness could enter. Therefore, these opportunities will come again but today is a good day to take some money back for both the indices and I have been suggesting not entering so that remains valid for today  Q: Would you change your mind if the Nifty cross any threshold?
A: It is quite possible that the Nifty is moving towards 6,000 and that is the next target and that is why I said that if one is a positional trader then either carry all positions or take some profits because that is a matter of trading decision and then carry the rest. Therefore, I do not have to change my mind. I am in the flow for an uptrend. Short-term traders have to get out and take money. Q: You have a buy on Larsen and Toubro (L&T) today?
A: The reason we have more buys than sells is that even if we are more careful on the index the market could easily go and then there will be stock opportunities which is what we want to focus and suggest traders to do now rather than focus on the index. So, L&T now is doing what Bharat Heavy Electricals (BHEL) had done earlier. We got BHEL right at the time when it was breaking out. L&T is making a similar head and shoulder pattern that could do exactly the same things. After the breakout BHEL gave a 30 percent return. I do not know whether L&T will do that but it is something worth buying today. Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed.
_PAGEBREAK_ Q: You expect Kotak Mahindra Bank to go for more?
A: It looks like that. Kotak has made some kind of a basing pattern and one of the advantages of being a technical trader is that we can change our views rather quickly, very flexible because idea is to go with market flow. Kotak was bearish, last five days have been good to the charts and now it suggests that an imminent breakout is occurring so it is far better stock to be in otherwise it is a laidback stock and because we want to less risk, this is the best opportunity. Q: You have a buy on Reliance Infrastructure today?
A: Yes and it is not because of a wave. It is because Reliance Infra has given same double bottom pattern, in fact a very unusual triple bottom pattern. However, stick to the double bottom pattern and it has broken out and that breakout suggests that there is more steam here. It is supported by decent basing pattern. So, Reliance Infra is a buying opportunity. This is not an investing idea. It is a short-term momentum trade. Q: You would take profit in Mahindra and Mahindra (M&M)?
A: It is not profit, it is a short sell. I would be worried of taking any short sells anywhere. We just put it in our list so that the list becomes more balanced. It shouldn't suddenly start looking one-sided completely. Mahindra and Mahindra is a short sell. So, if somebody has position in Tata Motors or wants to take a position in Maruti Suzuki then safely a bearish position in M&M could also be taken and that acts as a hedge. Independently in a market that is going to go up 100 points in the morning, I wouldn’t short M&M but if the market stalls, M&M is the first candidate we will look at to take a downside play. Q: 5,740 seem like where the market might open up but what should the strategy be on opening trade?
A: That is a disappointment because the SGX was suggesting more than 5,800. So, in comparison to what the SGX was trading at, 5,740 is a much lower. If the Nifty opens at 5,740 then for intraday trader there is a buying opportunity because the chances are that during the day we will see a move towards 5,800. That is going to act like a magnet. So, the trade should be for the day traders. If it opens around 5,740-5,735 then look to go long in the Nifty, there is more steam for an intraday traders and that applies to the Bank Nifty also. Q: Would you have an intraday trade on Bharti Airtel?
A: I would be a buyer in Bharti. The problem will be because there was holiday on September 9 and then the likely gap up. So, a gap up in Bharti would probably destroy any benefits that a day trader could have. However, for somebody who is willing to carry a position for few days, in spite of the gap up there is a buying opportunity here. It is moving towards Rs 340.
_PAGEBREAK_ Q: Will you want to trade SKS Microfinance. It has got a news angle to it but do you otherwise look at that stock?
A: I look at it and I am upbeat on SKS. It is building a large base and is now coming out of it. That takes time. However, I do not know whether one want to trade SKS on an intraday trade. I do not think this is an intraday instrument but if one wants to build a position, if one is a position trader then it is worth buying at current prices. Q: Any other midcap stock in which you would like to suggest a strategy?
A: Jammu and Kashmir Bank (J&K) is giving an attractive chart. It is not a day trading opportunity because there will be gap ups but it is heading much higher. So, if somebody wants to play a midsize bank then this is a perfect chart. Yes Bank is to be avoided. IndusInd Bank is much better. Q: Do you see more on the cards for BHEL?
A: No. The risk is going to be much higher now. We got BHEL at the right time now. We discussed L&T this morning and that is a far better stock in that area. Q: Chart check of Oil and Natural Gas Corporation (ONGC)?
A: It is still choppy and in a trading range. It is far better to talk about midcaps and which is what we did this morning than to go for the largecaps. I would not touch it.