"Our stop for the Nifty should be tightened because it has been a very decent rally and the stop should now be at 6,030. Just go with the flow," he says.
After underperforming the Nifty for quite sometime now, the Bank Nifty seems to have gotten its act together, says Sudarshan Sukhani of s2analytics.com. "I would be a buyer in the Bank Nifty because we have clear well defined exit," he told CNBC-TV18.
On the whole, Sukhani says he is long on the Nifty. "Our stop for the Nifty should be tightened because it has been a very decent rally and the stop should now be at 6,030. Just go with the flow," he says.
Below is an edited transcript of the interview on CNBC-TV18.
Q: A quick word on the Bank Nifty and whether that has stabilised at all?
A: The Bank Nifty has been underperforming the Nifty for the last few days. However, now it seems that the Bank Nifty has got its act together. It is quite likely that we can see a break above the 12,800 levels. I would be a buyer in the Bank Nifty because we have clear well defined exit. The exit is: if the Bank Nifty goes below 12,500, close your long positions. Till then enter the Bank Nifty, trade on the long side and for all we know momentum can now build up. The charts suggest that momentum is coming in this sector.
Q: Would that mean that the momentum continues on the Nifty as well? After the big run up, which saw the Nifty scaling 6,100, can one expect some more?
A: The Nifty is on a roll, isn’t it? It has made new highs for the calendar year 2013 on a closing basis. For the last three days, it was in a trading range. That trading range has been broken on the upside. Momentum remains strong and there is no sign of any kind of faltering of the liquidity gush or the momentum driven rally. So, we remain long in the Nifty.
There are no levels now. We are on the verge of crossing the highs that we made in January. So, I wouldn’t discuss any levels. I would just say let the market be up; we should be on the long side. Our stop for the Nifty should be tightened because it has been a very decent rally and the stop should now be at 6,030. Just go with the flow.
Q: How would trade Coal India because last week it was the biggest loser on the Nifty with a cut of about 6 percent?
A: Coal India has disappointed with a very sharp decline. However, I wouldn’t be a seller in Coal India. My sense is that it is going back to the Rs 290 support. In case we start seeing any kind of steadiness in the price or even minor gains, I would be a buyer in Coal India with a stop below Rs 290,
Q: Metals had a bit of a pullback but how would you trade something like Jindal Steel & Power (JSPL) now?
A: Jindal Steel is in a downtrend. It is in a bear market. It usually has small rallies and then resumes its down move. I would still consider short positions in it because there is absolutely no occasion to go and buy it. We just have to be on the short side.
Q: There is newsflow around Maruti Suzuki but technically how would you say the chart looks?
A: Maruti had a good day on Friday but that was mainly on account of the weakening Yen. I would not be a buyer here. Auto stocks are not giving us signs of any further momentum gains. The best we can say is that we will see choppy markets and they will stall their rallies.
I don’t see autos contributing to Nifty rallies. So, I would be a little cautious on Maruti. It is actually an avoid. If one has long positions, take profits.
Technically, though the trend is up, I would avoid it.
Q: In the banking space, you like IndusInd Bank?
A: IndusInd Bank keeps on making these lifetime new highs and there is nothing to stop it from doing so. We as technical traders have to be on the side of smart money, so we should be buying IndusInd Bank.
However, there is a way to buying the stock - We buy it when there is a small narrow range intraday or on a daily basis because whenever the stock contracts for a few hours, there is a momentum buying opportunity. These are short-term trades. I would be a buyer here.
Q: In the IT pack on the midcap side Mphasis made a very big move last week. It rallied close to about 13 percent last week. How would you trade it now?
A: CNX-IT index itself is cheerful and Mphasis is breaking out from a trading range. On Friday there was a very large move in Mphasis, so as a matter of trend, we should be buyers but as a matter of tactics, I would not buy today or even on Monday. I would buy only after a small dip occurs and not now.
Q: How would you trade Indraprastha Gas (IGL)?
A: The charts for IGL have suddenly turned bearish. On Thursday, the stock rallied and could not sustain its highs and then we saw a very big decline on Friday. This decline tells us that the current rally is probably coming to an end. Although it is too early to confirm it, the signs are clear and visible.
IGL is an avoid and if at all we have to take a trade, it will be a short. The trade has to be on the sell side.