Nifty to hold 5800; maintain long positions: Sukhani

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

Also Read: Experts see Nifty in 5800-5950 in Jun; give trading ideas Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: How do you approach trade today? A: We would still remain mildly bullish, which means we have long positions and we would maintain them. Broadly 5,800 as a support level should hold. If the Nifty cracks below it and then shows sign of not going back that would be a stop loss. Therefore, we have a tight stop loss. The stop loss is not in terms of levels, it is more in terms of intent and beyond that I assume this market is going up, it is not going to stop so quickly. We have had a decent Friday. So, the long-term trend is down, this rally will fizzle out, but whether in three days or 15 days, is a different issue.
 
Q: You have picked up Reliance Communications today? A: All three telecom stocks are doing extremely well. Bharti Airtel bouncing from lows, Reliance Communications (RComm) was in a trading range and Rs 100 has turned out to be a strong support for it. It bounced yesterday from Rs 100 support. I would expect RComm to break its range this time, go beyond Rs 115-117 and then embark on a journey upward. Reliance Communications is an attractive chart, for the day wait for morning opening and then go long. Q: Dena Bank comes into your list after a long time? A: It does. Dena Bank fell from Rs 96 to Rs 81, hardly a resounding endorsement of a bullish pattern. However, for the last 15-20 days it has stopped falling, it is now building a small trading range. It is not a very large base. It is now pulling up and breaking out of that range on the upside. So, the decline is over, the market is suggesting that the Bank Nifty maybe priming up for some renewal of that rally and especially public sector undertaking (PSU) banks. Dena Bank is an attractive buying opportunity, keep stops because the market can do anything. However, I would buy it. Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed. _PAGEBREAK_ Q: Some of the smaller pharmaceutical stocks were active yesterday, you have picked Ipca Laboratories? A: Yes, I have. Ipca Labs has been moving up. We didn't track it till yesterday. It is making new highs, new highs are bullish and yesterday it did retreat after making those new highs. I would be a buyer here. It is not a day trade; essentially we are looking at an entry today and then waiting for the next few days to get some gains.  Q: You have a buy on Tata Global Beverage? A: Yes. Tata Global has an excellent chart, something similar to RComm. Tata Global bounced back from support at Rs 135 and has resistance at Rs 153-154. It was at Rs 135 yesterday. I would expect a bounce from those areas back to Rs 153 and eventually Tata Global should breakout above that range and go higher towards Rs 175. It is not only a day trade; it is an excellent day trade. Traders could build positions in. Tata Global may do its own things even if the Nifty comes down. Q: You think there is more downside in Jain Irrigation Systems? A: Yes. It was a waterfall decline. It started cracking and never stopped. Last three-four days it has been in a small range. Trading ranges after a big downtrend often are continuation patterns. Jain Irrigation is not suggesting anything about going back. So, this is a continuation pattern, suggesting more pain is coming. It is a short sell. One should be looking at selling ideas and Jain Irrigation seems to be perfect. Q: Bharat Forge is also in your sell list today? A: Bharat Forge has broken down from a support level while RComm, Tata Global have held on to their support levels, are bouncing back. Bharat Forge broke down yesterday and suggested that that support is no longer willing to be held to. That gives a bearish head and shoulder pattern. Some stocks will come down. I assume Bharat Forge is one of those, which is now willing to go lower. Q: A quiet start on the Nifty, how would you approach it? A: I would still be a buyer. We have long positions, we are keeping them. These choppy conditions will come. The market cannot do one-sided moves especially when we are in a correction of some kind. Therefore, the short-term outlook remains cheerful. _PAGEBREAK_ Q: If the Nifty does go up another 50-70-80 points, would you be looking to take profits or you would let the market turn before you cash out of your long trades? A: I would let the market turn. There is no need to set a bar or set a number to this rally. I do not think it is required because this could be a nice correction and nice move. That’s the first sign. If it doesn't work it doesn't work. Q: What about Aurobindo Pharma, which did a good move in yesterday's trade? A: Aurobindo has gone through a decent correction, Rs 196 to Rs 175. That correction seems to be over and it is resuming its up move. So, I would be a buyer here. Do not rush into it but buy at some consolidation. Q: The one pharma stock that didn't participate in that move is Ranbaxy Laboratories? A: We sell it. It is not participating; it is cracking all kind of support levels. There is nothing there. Avoid it or sell it. Q: How would you trade Polaris Financial Technology? A: Polaris is worth buying into. Three-four days ago it went into and gave a spike on the upside. That was no sustained and that is not bearish. Polaris is now breaking Rs 120, which is a strong resistance and once it does that a more sustainable up move will come. I would be a buyer. Q: Can you make any sense of the chart of Apollo Tyres after the destruction? A: Nothing. Theoretically we want to sell it because something that has fallen so much is not worth buying. In practice it is not a good idea to sell short at this price and certainly not buy it. Q: How would you trade Mahindra and Mahindra (M&M)? A: Mahindra and Mahindra is giving right signs. I would have thought that Maruti Suzuki for the short-term trader is probably a better opportunity. Q: You see more downside in Adani Power? A: Yes. It has broken the last of the support level and it is amazing how some of these stocks have been tumbling down. Therefore, no matter what the Nifty does, Adani Power is moving lower, any small rally should be sold into.