Mkt in sustained upmove; stay long: Sudarshan Sukhani

This week will be the start of the earnings season. Locally, our market will focus on some important issues like fuel price hikes, banking licenses etc.

Last week was a constructive for the market, Nifty rose 2% on the back of the US fiscal cliff getting temporarily averted. Midcaps saw another week of outperformance and ended with gains. In an interview to CNBC-TV18, technical analyst, Sudarshan Sukhani, s2analytics.com says he would continue with a long bias for today because all signs indicate that a sustained upmove is in place. Those who are long should stay long, but they should not expect an immediate target. "Currently, the market is nice for traders and they must take the advantage of it. Remain long and go long," he assets. Even for those who are not long, market is giving them opportunities everyday, he adds. Also read:9 blue chip cos add Rs 50,630 cr in m-cap; ONGC top gainer Below is the edited transcript of his interview on CNBC-TV18 Q: What is the strategy on Nifty, would you continue with your long bias today? A: Yes, we are in an uptrend. We had a breakout and that breakout has been sustained. There is follow-through, the market is giving gains almost everyday, intraday dips are getting supported. So, all signs of a sustained upmove are in place. Now whether that upmove lasts or does not last is something that the market will decide but as trader one has to follow the market. People who are long stay long; do not look at immediate target. A positional trade could go much higher than we imagine. But those who are not long, everyday is giving opportunity. I am saying this because the market is not opening with 40-50 points of gap up, then the opportunity would vanish but it opens with a 10 point gap or sometimes a down move, these are opportunities for reentries. So, currently the market is nice for traders and they must take the advantage of it, remain long and go long. Q: Banks have been on your buy list, but today you have a sell call on Kotak Mahindra Bank? A: Kotak is doing its own thing now. Earlier it was having a strong momentum drive when the market was in a trading range and now it is breaking down. I assume that breakdown is primarily a correction but a consolidation then a breakdown from a consolidation, while the Bank Nifty is roaring up, that is not a good sign. It is probably the weakest stock amongst the private sector banks. So there is a selling opportunity here. Even in a market that goes mildly up, there will be opportunities to go short and make money. Kotak seems to be qualifying for that. It had an upward sloping flag. That is a fairly bearish pattern. There has to be a stop loss, if something goes wrong you must get stopped out but it is a trade worth taking. Q: Voltas too is a short for you today, why? A: Voltas is doing nothing. It is making lower highs and that is the classic sign of a bearish pattern. It is not only making the lower highs, it is on the verge of a breakdown, which could eventually take it below Rs 100. That was a stabilizing factor up till now but the large bearish pattern it is making, says this time Rs 100 may not hold. So, here is a positional short in what is an ongoing uptrending market, which quite often happens. 8 out of 10 stocks go up, 2 come down, and so there is no harm in taking these trades. Short selling in such a market should be done only by professional traders, but they should be aware that these opportunities exist. Q: There are  many midcaps in your buy list. Let us start with LIC Housing Finance? A: LIC Housing has been in our buy list consistently. The stock is doing very well. It rallies, then gives a consolidation of 2-3-4 days and begins a new upmove. These upmoves are tempered; they are not those roaring 10-20 percent kinds of upmoves. LIC Housing again had a rally then a small consolidation and an imminent breakout from a consolidation. So we are buying just at the point of breakout. That tells us that as the stock may go to new highs, we would hopefully be part of it. Non-banking financials are in very good shape, all of them. LIC Housing is doing very well and we should be with the sectors that are being favoured. Q: Today, you have chosen a risky one from the real estate space, Indiabulls Real Estate, why? A: It is not risky in the sense that I have been talking about Indiabulls Real Estate consistently. It is one of my three favourites; Housing Development Infrastructure Ltd (HDIL), Indiabulls Real Estate and Prestige Estates, which is not in F&O. Indiabulls was in a trading range and eventual it breakout from that trading range. We are seeing this pattern consistently and there is a message here. The message is that this is not a market that is going to come down tumbling. Stocks are doing this step-by-step progress; they are not going through a bubble phase, they are going through a steady uptrend. At some point all this will end, but I do not see the point coming immediately. For Indiabulls the rally is likely to continue and after a trading range we should see good gains. Whether the gains come today or tomorrow, the trade is worth taking on the long side. Q: Wockhardt is back in your buy list? A: Wockhardt is an amazing stock. After it rallied from Rs 400-1,000, we thought that maybe this is a buying opportunity and from there it went to Rs 1,800. Then there was a sharp decline and that decline had a down sloping trendline. That trendline has been broken on the upside and a trading range has given way to very big gains on Friday. The immediate target for Wockhardt which could be a day trading target, It could go and test Rs 1,800 again. Q: You have a buy on Coal India too today. A: Yes, that is probably the riskiest of the lot. Coal India is quite choppy. It is going in a trading range. It has just come out of a small consolidation, so maybe it will go to the higher end of the range which is Rs 370-375. There is a small trade here, but given the fact that most blue chips are doing well, this trade is worth taking. _PAGEBREAK_ Q: How are you positioned on Industrial Finance Corporation of India (IFCI)? A: I would not touch it at all. As a technical trader, if I look at the chart, I would say Friday’s move deserves to be bought into. But personally I would never touch that stock. Q: Cairn India has been quite volatile. Is it a good looking chart or not quite sure? A: Not quite sure. Sometimes it gives the impression of going to Rs 400 and sometimes to Rs 280, so that is not a right chart to trade in. As of now, again it is showing signs of life, so for a short-term trader there is a buying opportunity. But it is quite confusing generally. Q: A lot of retail investors are very happy to see Reliance Industries (RIL) above Rs 860. What is your call? How much more do you think there? A: I think it is on the verge of a significant breakout if it happens and given the fact that the Nifty is cheerful, it could. Reliance is a buying opportunity even now. It has a very strong resistance band at Rs 880, so think of that as a zone rather than a number. If that zone is crossed on the upside, it enters into a new bull market. That could be very exciting for Reliance and for the index. Q: How much upside do you see in Manappuram Finance? A: We had suggested that it should be bought when it was Rs 30 and at that point it had already rallied 30 percent. Manappuram will slowly go much higher. I am not sure immediately how much it will go up because it has run up a lot, so there is this question of patience and of consolidation. However, an investor or a position trader should remain long in it. Q: Is there any trade in Wipro today? A: I would be a buyer in Wipro. Wipro’s charts are excellent. It made a bullish pattern; has broken out of it and every dip in Wipro is a buying opportunity. So today also we need to wait for an intraday dip. If that comes about, go long. Do not buy on an up gap. Q: You have been talking about bullish targets for Jaiprakash Associates, but for a short-term trader where is that stock headed you think? A: It is headed up and I have some long positions in it as a short-term trader. An immediate target could be Rs 104, which I assume should come about. Q: Any thoughts on Sintex Industries? It was up about 8 percent last week? A: Sintex is now turning around. It is building a base. Base building is always a very tedious exercise. It goes up, comes down creates a lot of confusion, but my sense is that the worst for the stock is over. For a position trader, the current prices justify buying and building a position. For a short-term trader, there is probably no opportunity in midcap stocks because they should focus on blue chips. Q: How are you approaching gold these days? Do you think there is a lot more downside to it? A: The impression is that gold is now breaking on the downside. It was in a trading range but it is now touching the lower end of the trading range. That is not good news for gold traders or rather for people who want to go long in gold. For traders, I think a short selling opportunity will come very soon.