Close long positions if Nifty breaks below 6000: Sukhani

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

Below is the verbatim transcript of an interview aired on CNBC-TV18. Q: Waht is your take on the index? A: There is nothing to report. In fact as traders we are just waiting for the market to give us a cue whether the Nifty wants to go up or wants to come down. Since the trend is up and the way to look at it is that the trend itself pauses in between. So, the consolidation in the Nifty could easily be a pause in an overall uptrend. Also Read: Global mkts weak; Nifty eyes key earnings Therefore, I am assuming that the market will be in an uptrend unless proved otherwise and the otherwise is that the level of 6,000 must be broken on the downside. Once that is done then we are open to close all long positions and then looking towards short positions in the Nifty and in the other blue-chip stocks. Q: You have a buy call on Ambuja Cements? A: Yes, after a long time cement has come in my buy list and Ambuja is the first of the cement stocks. In fact the other cement stocks are giving similar signs but not confirming a buy. Ambuja has done that. A deep decline, a deep correction in cement, a relatively deep correction has probably come to an end in Ambuja where a trading range was developed at the lows of the correction and the stock has finally broken out on the upside. So, for the day as well as for few days Ambuja is certainly a buying opportunity. Look to buy it and then if it works out, if the day trade is successful then hold on to it for a positional move. Disclosure: I have no personal holding in the stocks discussed. _PAGEBREAK_ Q: You are bullish on Havells India? A: I have been upbeat on Havells earlier also and this stock comes in our list because I am assuming that a sharp correction in the stock is now getting over. This is also to be looked at in context. If the Nifty finally decides to crack then these sharp corrections will lead to even sharper corrections, that is something we cannot avoid but for the time being, I would assume that Havells has found support at Rs 630-635 area. It is now willing to bounce and go higher. A small trading range is on the verge of breaking out on the upside and if it does that then it can easily go and touch its earlier highs of Rs 695 or 700. So, for a very small risk the rewards are handsome and traders who trade it will understand the risk as well as the reward. Q: You also have a buy on Shriram Transport Finance Corporation? A: Yes, Shriram Transport is part of the non-bank financial company (NBFC) group, which is very upbeat. The stock went down to Rs 600 and has rallied all the way to Rs 800 before going through a small, brief and reasonable correction. Corrections are inevitable and they are also important for traders to let off steam. That has happened in Shriram Transport. The corrections may well be over. It is seeing gains now, a couple of days of gains and if those gains are held then the first challenge will be to Rs 800 and then to new highs once it crosses Rs 800. So, this is not just a day trade for buying. It is also a positional trade. It is a very attractive opportunity. Q: Ashok Leyland has been struggling and that one qualifies for a short call today? A: Yes, actually Ashok Leyland has been the least favourite of my auto stocks while Maruti Suzuki, Mahindra and Mahindra (M&M), Tata Motors have all rewarded traders as well as investors. Ashok Leyland has done nothing. It did give a rally towards Rs 29 but from Rs 29 it went on slipping. It made a descending triangle, a distribution and there was nothing to distribute. The stock just had a tepid rally and now it is at Rs 24.50 promising and threatening to break another support level and eventually reach Rs 22. It is a very disappointing chart. If there is a stock that needs to be short sold, Ashok Leyland qualifies for that. Q: Financial Technologies is a chart you do not like much? A: Yes, Financial Technologies is a short sell. It is one of those stocks where a lot of news comes and the price action never commensurate with the news. The stock has been in a trading range for more than two months now. It is one of those stocks, which is distributing at the top after a sharp rally and the trading range is on the verge of breaking down. I would be a comfortable seller in this in spite of all the news that keeps coming in. A downtrend has started and once the downtrend begins, position traders can expect very decent profits. Incase it does not work out, please remember to use stop losses but the chances are that it could. Q: Jubilant Foodworks has been on your sell list before? A: Yes, Jubilant Foodworks is one of those erstwhile momentum stocks that could do no wrong. Now the stock has been making a visibly clear patter of lower highs lower lows and this is a short sell. The lower high lower low pattern is likely to persist because as it keeps on coming down it also keeps on breaking support levels and making bearish chart patterns. All in all a bearish stock, I am comfortable suggesting short in it, look for lower levels. Chances are eventually it could go back all the way to Rs 1,000 of course not immediately but the charts are not comfortable. Q: What kind of levels would you watch on Bank Nifty? A: The Bank Nifty itself is following the Nifty. Usually the Bank Nifty leads but this time it is the Nifty and heavyweights, which are the non-banking stocks like Reliance Industries, Oil and Natural Gas Corporation (ONGC) and IT stocks, which have led the Nifty. However, the chances are that in February. We could easily see a turnaround when the Bank Nifty could lead either on the upside or on the downside. Therefore, for the Bank Nifty to do that, we are watching the level of 12,500. If that level is breached on the downside, a down move has come and the Nifty could follow even if the Nifty does not break. On the upside a breach of 12,800  for the Bank Nifty will tell us  that at least a 5-7 percent momentum  is getting gathered and that would be the sign, not only to go long on the banks but also in the other blue chip Nifty stocks. So, the bank Nifty needs to be watched very carefully. _PAGEBREAK_ Q: Can you still buy Punjab National Bank? A: Punjab National Bank (PNB) is a buying opportunity. After yesterday’s big move one cannot buy it but before that big move, I have been advocating buying in PNB consistently and persistently. I have explained that public sector undertaking (PSU) banks can be divided in two parts; the good banks with good charts and PNB, Bank of Baroda qualify in good charts. So, buy PNB once it goes through a consolidation and correction. There are higher levels ahead. This is not the end of the upmove. Q: Your views on Bharat Heavy Electricals (BHEL)? A: Bharat Heavy Electricals is actually a buying opportunity but it a buying opportunity for a very risk acceptance traders. The stock has come down to Rs 220; a level where it has reached many times and bounced back. So, with the stock reporting, it is anybody’s guess where it can go but those who assume that Rs 220 will hold, would be justified in taking a short-term trade on the long side, ideally by buying Calls and hope that all works out and this support can hold. Below Rs 220, there is nothing to hold onto and consider selling it. Therefore, it is really a stock where both trades could work out. Q: Your take on Suzlon Energy? A: Suzlon is a buy but after yesterday’s big move can it be bought today. The answer to that is no. however, wait patiently for a consolidation and a minor dip, which will inevitably come and once they come, Suzlon can be bought into. Much higher targets are now available. The stock has bottomed out and making attractive bullish pattern. Q: How about IFCI. How would you trade that? A: IFCI has never been a favorite for me. On the charts it does appear that the stock has found strong support in the Rs 32-33 area. It is bouncing back and it could see higher levels. So, if someone understands the share, like it and wants to trade in it then there is a long opportunity in it. Otherwise, it is best to avoid it. There are so many other opportunities in NBFCs.