Sukhani sees 5750 as strong support, suggests buys

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

Mkt looks oversold; start hunting quality stocks: Experts Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: What would your approach be on the Nifty today? A: We have been bearish on the market. I want to recollect how market flow; we went bearish and said we must be sellers when the Nifty cracks 6,060. That was already 150 points below its highs. That is when the realisation comes. It is never easy to sell at the highs. It is not possible. At 6,060 the Nifty is today likely to be 5,760-5,750. The pattern targets are being met, hopefully in the morning. So, there was a 300 point gain on that trade. That is how trading develops; we take a view, take the trade and then expect the market to work out. That was the background that the entire down move was captured once it was triggered. The tops are never captured and the bottoms will never be. At this point for traders; short-term or positional traders, 5,700-5750 is a strong support area. I would expect this support to hold. So, short positions taken then should now either be protected with tight stop losses or profits taken on them and closed, which means that I would expect the market to stop here, of course, they can do what they want, but as of now I would not be overly bearish in the short-term, as well as the intermediate term also could require a pause. Q: You have a sell call on Indiabulls Real Estate? A: Real estate stocks are cracking as if there is nothing to hold there. DLF has broken; Indiabulls Real Estate has broken support level and also confirmed a bearish head and shoulder, a lot of stocks are doing that now. While the Nifty is completing its pattern, midcap stocks are now developing and creating their own. Therefore, Indiabulls Real Estate is a short sell and most of the real estate stocks are selling opportunities. Q: You also have Raymond as a short selling idea today? A: Yes and we had Century Textiles and Industries earlier. These textiles cum real estate stocks are strong rally, ended up in a distribution pattern and that distribution is now continuing on the downside for Raymond. It was a sell earlier also. There is much more downside. I want to tamper what I explained; my point was that the Bank Nifty and Nifty have met their pattern targets. That does not stop them from going lower. It is prudent trading to take profit. Midcaps are beginning their down move. So, I do not see the midcaps suddenly stopping their declines. _PAGEBREAK_ Q: You have Tech Mahindra on buy side which did a good move yesterday? A: Yes, it did. Tech Mahindra has been fairly choppy. It seems that Rs 900 worked out as a support and it has been bouncing of that support and regularly now suggesting that the worst is over for the stock. It is one of the few buying opportunities, but most IT stocks, the top ones at least are in buying area. Tech Mahindra is joining them. For today it is a trade worth taking. In a choppy market some IT stocks will do well. Q: You have buy on Cipla from pharmaceutical space? A: We have been upbeat on Dr Reddys Laboratories, Sun Pharmaceutical Industries and now Cipla. Cipla was going through a correction. It fell very sharply, but that decline needs to be taken in context of the strong rally it had seen earlier. That correction seems to be over. IT and pharma are going to do their own thing and Cipla will have better beta as compared to Sun Pharma or Dr Reddy's at least for the next couple of days. Q: You like Idea Cellular's chart? A: Yes. It is surprising that Idea has not done what Bharti Airtel or Reliance Communications (RComm) is now doing. RComm suggests that some kind of a short-term top is being made, but Idea is not doing that. Idea is doing its own thing. It rallied; it doubled itself and only shows shallow corrections and then a renewal of the rally. So, it is remarkable stock to be in on the long side, every dip here, which is what we saw, is a buying opportunity. Q: Adani Ports and Special Economic Zone have been weak for a while and you have a sell call today? A: Yes, in fact all three Adani group companies. It is just a matter of choice. We had Adani Enterprises earlier; the rallies have fizzled out, their declines have started again. It is very worrying when entire group suggests that something worst is coming. Adani Ports is a short sell and, not only for the day but also as a positional short.  Q: How would you approach Reliance Communications today? A: I would still buy it. It is fact that it may be going in a range, distributing, one do not know. However, as of now it is one of the stronger stock, it has come at Rs 100 support, it is still a buy. _PAGEBREAK_ Q: What about Wockhardt. It is coming back to Rs 1,000 repeatedly? A: It is. It is a disappointment. I thought it is building a base there and maybe the worst is over. It is not. Wockhardt is some kind of a short sell, just keep tight protective stops. However, nothing has changed. Q: How would you trade Ashok Leyland? A: Ashok Leyland is a sell. It has completed its uptrend; it has given a distribution pattern, there is nothing there now. Q: JSW Energy also had quite a knock yesterday, you track? A: Yes, I do. It is at new lows and it is not part of a group that is very attractive now. It is a short sell. I think any rally today should be sold into. Q: Is there a short selling idea in Jindal Steel and Power (JSPL) because it seems like there is more pressure in stock? A: Yes, there is. Wait for first 15-20 minutes, look for weakness and go short. Q: How would you trade Bajaj Auto which stood against falling market yesterday? A: Theoretically it has broken down, but I would not sell it short. I would avoid it for sometime.  Q: You want to initiate any long position on the Nifty now if it finds some support around 5,700? A: I would be cautious. This is not a time to be brave. It is a time to step aside. I do not see the market suddenly rallying.