Nifty to break on upside; go long: Sudarshan Sukhani

Technical analyst Sudarshan Sukhani of s2analytics.com expects the Nifty to breakout on the upside. "Yesterday's narrow range day and SGX Nifty, both suggest a breakout," he said in an interview to CNBC-TV18. He recommended traders to go long now.

"We have to respect breakouts, we will just see how much momentum there is on the upside, but there is a trade and one should be long. This market is not for short sellers," he added. Also read: JPMorgan AMC cautiously optimistic on India. Below is the edited transcript of his interview on CNBC-TV18 Q: Any trade that you would initiate on the Nifty today? A: Yes. Yesterday, we saw a very narrow range day, narrowest in many weeks and months. That tells us that the Nifty is ready for a breakout. Now, whether that will be a big or small breakout only markets will tell us but there is a trade in the Nifty. The SGX Nifty suggests that we are going to breakout on the upside. If that is so, then in the morning, after first few minutes of cooling off, traders should go long. We have to respect breakouts, we will just see how much momentum there is on the upside but there is a trade and you should be long. As I have been explaining, this market is not for short sellers. Q: You have picked Yes Bank on the private banking space? A: My own sense is that at least the private midcap banks are now going through a bubble phase. They will go much higher than we imagine and then take rest for months, maybe for even years. This bubble phase is very interesting. Yes Bank had a big down day on Friday and yesterday it moved in a very narrow range. That narrow range is probably a precursor to telling us this stock is going to breakout on the upside. It is a very strong stock in any case, so the risks are very low. If the breakout actually works out, we will see a big move. The breakout is also imminent in the banking index, which was in a similar narrow range yesterday. Q: You also like Reliance Capital from the financial space? A: I like Reliance Capital because it sometimes does unusual things. It is not a very safe buy. It went to Rs 450 then came down to Rs 365 and it now again bouncing against Rs 450 and willing to cross that level. This has been a V-shaped recovery and they have their own risks. Once, it crosses that threshold as it suggests it will, it can go much higher because it is a momentum driven stock. It is a stock worth buying today. Q: You have Jain Irrigation on your sell list first? A: Jain Irrigation is in the exact opposite of some other stocks. It went up, then around Rs 75 it has faced heavy resistance and it is coming down. For example Reliance Capital is consolidating at its resistance levels and telling us that maybe it is willing to cross that line but in case of Jain Irrigation, the resistance has held and the prices have actually started falling. That gives us the sense that we will probably see a correction in Jain Irrigation and that correction could be deep enough. It is still building a base. So, for professional traders, there is a trade on the short side. Others need not go in it , but they must not buy it now. Q: Do you feel the rally is done in the metal stocks as well, you would sell Steel Authority of India (SAIL) today? A: Yes, the rally is done in metal stocks. SAIL has been a distinct under performer. It is surprising that it is at Rs 85 now because it was at Rs 250 three years ago. Here, there is a long-term bear market in effect. We want to go with that bear market. The trade is that it has failed its resistance levels just as Jain Irrigation did and it is now sliding down. So, in a market that keeps on going up, as it could do today as well, there are still short selling ideas and SAIL is one of them. _PAGEBREAK_ Q: IndiaBulls Real Estate (IBREL) is a buy for you? A: IndiaBulls Real Estate has been a favourite; it was one of the two top Futures and Options stocks and the other was HDIL. IBREL for the last four-five days is trading in congestion and that congestion will breakout up or down. Given conducive environment of the market that breakout should be on the upside. If it is on the upside, there is a strong momentum surge that could be expected. We want to positions ourselves on the long side and wait for other strong buyers to come in. That would happen today or tomorrow but I think there is a lot of upside left. Q: Your view on Adani Enterprises? A: We tracked Adani Enterprise when it was in a trading range and took a buy at Rs 220. Since then it is at Rs 265 and has given us about 20 percent plus. We have repeatedly entered and then re-entered. That re-entry is again coming. Even though, Adani is a holding company, the charts of Adani are excellent and they promise there are much higher levels to come. It is again willing to make a new high for this uptrend. Since the trend is already up, we want to go long in it. Yesterday’s small narrow range promises to breakout on the upside today. Q: Technically, how are you looking at Development Credit Bank (DCB)? A: DCB had a dream run for the last few days. Technically, it is good for more as most banks are and the Bank Nifty itself should be on a roll today. Do not buy a stock after such a big run up, so you have to wait patiently for DCB to come down. Therefore it is not relevant today. Q: What did you make of the dip in Titan Industries yesterday? A: It was a surprise but then all stocks will correct and especially when there is a one-sided theme that this can never go down, it suddenly comes down. I would be a buyer in Titan, but there is no rush to buy it today morning. In the next few days, I think a buying opportunity will come. Q: What about the chart of Lupin? A: Lupin is in a trading range and that confounds me. Sometimes, it seems to be going down and sometimes going up. Today, the sense is that maybe it is going to break out. Its peers like Cipla, Dr. Reddy’s, Sun Pharma are doing well, so perhaps Lupin will get a breakout this time. It is a stock that we must track. If there is going to be a breakout then it will be a decent move up. Q: How much more downside do you see in something like Tata Consultancy Services (TCS)? A: Titan has broken Rs 1,250 support, which it held-on for three months. It has made a bearish pattern  from Rs 1,350-1,250, so it could go to at least Rs 1,150 or even Rs 1,100. But it is not a good time to call a decline in a blue chip like TCS. So the best thing is to stay away from it. Q: What about Reliance Communication? A: Rel Comm is moving up and that is evident on the charts but I think it can move up even further. So we just want to wait for some dips and consolidations. It is currently offering an entry opportunity. Rel Comm is a trade that is worth taking today. Disclosure: I have no holdings in the stocks discussed