Traders add Nifty positions; short sell Bank Nifty: Sukhani

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

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Below is the verbatim transcript of Sukhani's interview with CNBC-TV18.

Q: Do you think Bank Nifty is to be watched more than the Nifty today?

A: I still expect the Nifty to outperform the Bank Nifty. The Nifty has broken out of a trading range yesterday and there was a long position with a stop at 5,900. That position is intact; traders can add to Nifty positions, move the stops to 6,000. These are all technical issues. However, broadly the Nifty continues to be in an uptrend and the Bank Nifty was a short sell.

I would not change that view today because one day is only a relief rally; it could be a bear market rally, it could be anything. Therefore, I would continue to say that on any rally the Bank Nifty continues to be sold into until we see a consistent change in this trend. One day is not enough.

Q: You would sell Canara Bank today?

A: I would sell it. Canara Bank has fallen from Rs 440 to Rs 325. This is not a bull market and yesterday it went up. One must see the context. It has done these rallies earlier also during repeated decline and all the rallies were eventually sold into and the stock saw lower levels. Therefore, unless proved otherwise I am assuming that this is a relief rally, keep a stop loss, keep the context, which means do not rush into sell in the morning but it is a short sell.

Q: You are long on Hindalco Industries?

A: Hindalco is a much better chart. It is making bullish consolidation and breaking out of it. Sesa Goa and Sterlite Industries are doing the same patterns. Hindalco is better of the three. Therefore, I would be long in it today.

Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed.

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Q: Fundamentally it seems like Tata Consultancy Services (TCS) continue to remain a core element in the portfolios of many investors despite the huge run up that we have seen but technically how do you approach that stock now?

A: Technically I would not be a buyer in TCS in spite of today's expected rally or a gap up. The stock has run up and all run up come to a consolidation phase. That is the point at which TCS should be bought into and as of now I would say that Infosys, Wipro and Tech Mahindra, all three offer better trading opportunities as compared to TCS.

Q: How would you trade Axis Bank and UCO Bank?

A: Axis is still a short sell. It is good for the market but it's one up day after sequence of down days. It is not enough. One does not have to trade but if one sense an intraday weakness or stalling of prices then Axis should be sold into rather than bought.

UCO Bank is a different story. The stock was rallying even before yesterday and that suggests that there is momentum in the stock. It is very volatile so traders have to be careful but the trade here would be to go long, not today. Yesterday was a big run up day for UCO Bank.

Q: If the market opens at 6,050 level would you initiate a fresh long call and then how would you approach it for the rest of the trading day, at what point would you choose to cut your long positions?

A: I would initiate a fresh long call because the market is suggesting that it is breaking out of a range. It is not for me to question the wisdom of the market. The stop for this trade is about 6,000 approximately. If the market moves up, traders should trail it but as of today 6,000 is good enough.

Intraday traders should get out before the closing but otherwise carry this position to the next week, if the market closes higher.

Q: Will Oil and Natural Gas Corporation (ONGC) be a part of the market upmove and lead it high today?

A: It seems so because it broke out yesterday after a narrow range of many days. That compression usually does not end in one day. It continues. Therefore, I would be a buyer in ONGC. Any opportunity after the first 10-15 minutes of cooling, buy it.

Q: Are the charts of MindTree and Hexaware Technologies are looking good?

A: Yes, both Hexaware and MindTree. We have been tracking Hexaware consistently. MindTree is not something very popular but after four day consolidation MindTree is ripe for a rally and for an intraday trader it is a stock worth considering.

Q: How would you trade Dabur India?

A: Dabur has come in our buy list repeatedly. I would not buy it. I would take profits and step aside. It has done its bit. Dabur is not expected to go up relentlessly. It won't do that. There is no buying opportunity. That was much earlier and we got it. Do not buy now.