Be on long side; buy on every dip, consolidation: Sukhani

It was a constructive week 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 of over 3%. Oil and gas sector saw gains, stocks rose on hopes of a staggered diesel price hike by the government.

There are lots of important events for next week viz earnings season for, then IIP numbers for November and after an inconclusive meet on Thursday, an Empowered Group of Ministers will meet on Monday to look into the auction of telecom spectrum. In an interview to CNBC-TV18, technical analyst Sudarshan Sukhani, s2analytics.com suggested traders to be on the long side. "They must look to buy every dip and every consolidation," he added. For the coming trading week, one must look at buying blue chips and momentum driven stocks, he advised. He is upbeat on stocks like IDFC, Aditya Birla Nuvo, Wockhard and Infosys. Below is the edited transcript of his interview on CNBC-TV18 Q: What about you? Do you concur with that view that perhaps 6,100-6,150 could be on the cards? A: It is certainly likely. While I am not very keen on giving a target because the market will do what it wants to do, the trend is very clear and the trade is simple. When the breakout occurred at 5,920 we should be long and that is the trade we want to maintain. Once the market breaks out of five week long narrow trading range, it does not do that for 50 or 100 points. Normally there is a sustainable momentum behind that breakout. So, all said and done, rather than put a number to it, I would say traders must be on the long side. They must look to buy every dip and every consolidation. Q: Midcaps saw quite a bit of participation do you find any stars in that space that you would recommend for the trading week? A: There are no stars, there are only stocks, but within the universe of stocks, next week should see a lot of excitement. There are two segments that traders should focus on. First are the blue chips that are primarily Nifty stocks. This is a time to buy blue chips. The Nifty will go up because Nifty stocks will go up. Second set of stocks is, momentum driven sectors. A lot of opportunity will come next week. I prefer is to be conservative because momentum plus Nifty is the ideal combination. I am looking at good momentum drive in IDFC. IDFC has completed its bear market. It is making the right steps, higher highs, and higher lows; a breakout then a consolidation, a pause and then a renewed breakout. I would expect IDFC to continue with this pattern next week. It is a buy. This is a bull market of some kind or the other, so, we are looking at buying opportunities as of now. The second stock that I am very upbeat on is Aditya Birla Nuvo. Aditya Birla Nuvo has crossed Rs 1100. Same pattern as IDFC except that the bear market never came in this stocks. There is higher highs, higher lows then a trading range, a breakout and the promise of a much higher level. Importantly, both the stocks that I discussed are not overbought in conventional terms. There is steam ahead on the upside. I am looking at Wockhardt. Wockhardt went up to Rs 1600-Rs 1700 and then corrected. That is a healthy correction for a stock that was on a tear. That correction is over because it has broken out of a small trading range that tells us that the correction and consolidation could lead to not only the earlier highs but also the promise of new highs finally. It is a very attractive buying opportunity for next week. Finally, it is Infosys. I am upbeat on Infosys. The stock chart tells me that a base is being built. It could be choppy, it could go up and down but I would be a buyer in it. Traders could simply go and buy Calls if they are in derivatives or buy equities, but buy Infosys; it is likely to be an outperformer. Q: Given the fact that midcaps have seen quite a bit of traction for many weeks now, do you think this outperformance in the broader markets will continue? A: I do think the outperformance in broader market will continue. There is a season for midcaps and we are entering that season again. In fact in the last four weeks there was an indifferent performance; some stocks were up and some were down. However, now along with the Nifty, the blue chips and the January effect, midcaps are likely to do very well. One is not sure of when that momentum will disappear. At this point, they are purely trading ideas and not investing ideas but there is money to be made in that.