Nifty in downtrend; traders could book profits: Sukhani

Sudarshan Sukhani of s2analytics.com, in an interview to CNBC-TV18, presents his views on the market for Monday. He expects some short-term downtrend in the Nifty and feels traders could take profits now.

Also read: FIIs invest $2 bn in Indian equity mkt in Sept Below is the edited transcript of his interview to CNBC-TV18. Q: What is the direction on the Nifty, do we continue with Friday? A: We do continue with that, but the market itself is going to give us a gap down. So it is likely that a lot of the decline would be factored in the gap itself. Q: What are the levels you would look for? A: There are no levels in the Nifty. We are in some kind of a short-term downtrend. I am not looking at the Nifty to reach 5,500 at least in this leg of the decline. Today’s short-term fall should be used by traders to take profits and then step aside to see how the markets behave. There will be more shorting opportunities. A pattern target is 5,500 but not necessarily now. So today’s decline is to be used mainly as a profit taking measure. Q: No fresh shorts entered into irrespective of any level, you watch the gap down opening and don’t deal on Nifty? A: We watch the gap down opening and we hope we don’t get it for the Bank Nifty and the Nifty both and during the day. We plan to exit our short positions as the markets could easily stall for some days. Q. The Banks got hit the hardest last week with most of these big ticket banks falling above 10 percent or so. Would you sell ICICI Bank today? A: Yes, I would. Even as we take a profit in the indices, individual stocks will do their own thing and that is what keeps on happening. ICICI Bank is now giving us the same bearish pattern. But, the Bank Nifty has some components that may not fall as much. ICICI Bank unfortunately is likely to be an outperformer on the downside. Go short in it for the day after a gap up, wait for those traditional 15-20 minutes and go short. Q: Your other short candidate is Reliance Capital. What would be the levels you would watch out for? A: This is an underlying theme. The Bank Nifty has given us a bearish head and shoulders, broken down, all financials, all banks are giving us the same pattern. That is how the index gives its pattern, it is a collection. Reliance Capital is giving us a bearish pattern, it is an intermediate top there, it is probably easier short sell than the banks itself significant downside can be expected. It is a day trade as well as a positional trade. For positional traders, try to buy puts or try to sell calls and just hold on.