Mkt to be choppy, not a good time to trade Nifty: Sukhani

In an interview to CNBC-TV18 technical analyst, Sudarshan Sukhani of s2analytics.com shared his reading and outlook on the market.

Also read: See US mkt rally continuing; volatility in gold Below is the verbatim transcript of Sukhani's interview with CNBC-TV18: Q: Small blink for the market yesterday, how would you chose to approach it this morning, you think there is a bit more retraction on the cards or would you buy the dip? A: I would suggest that the Nifty itself is now becoming choppy. So it is not a question of retraction or dip, the chances of making a profitable trade in the Nifty have now come down because we could easily see a correction then a rally and a lot of choppiness in between. We are coming at some tipping point. Either this market will cross 6,100 at which point a new uptrend would probably start or we will see choppiness. Last option is that we will see dips. All said and done, this is not a good time to be in the Nifty. Q: You had equal number of buy calls and sell calls on your list, why would you sell Cipla this morning? A: I have an equal number of buy calls and sell calls because it reflects a state of confusion. I am also little unsure of exactly what the market should do. These are not good quality trades in the sense that they are low conviction trades. Cipla is a sell because a correction is in the offing. It is not a change of trend but in this market. After this 600 point run up, corrections probably could be tradeable. It had a bad day yesterday and it is on the verge of a breakdown from a trading range. So traders should understand, we are only talking of short-term one or two day trades here but it could work out. Q: Just for the day, you would buy into Hindalco Industries? A: Hindalco Industries is a slightly better quality trade because it has already come out of a bullish pattern. We have been long in it suggesting long positions then it has confirmed the head and shoulder pattern, another long position and now for the last two days it was in a narrow range. When the intermediate trend becomes up, narrow ranges are usually resolved on the upside. So, I would be a buyer in Hindalco Industries. In fact, I would suggest to take the trade in the morning if you see the slightest gain from yesterday’s closing price and carry forward it next week if it makes money today because then there is more upside here. Disclosures: Sudarshan Sukhani does not have holdings in any stocks discussed. _PAGEBREAK_ Q: Havells India is also a long trade? A: Havells India is a long trade. It has been in a sustained upmove. Then we saw a small flag like formation, which is primarily a shallow dip. We are now buying a breakout of that shallow dip. It is moving towards new highs again. This stock itself has been an outperformer broadly in the capital goods segment against the Nifty. So, the buying here is justified not only for the short-term trader but also for somebody who wants to keep a positional trade for a few days or weeks. Q: You are cautious on a stock like Hexaware Technologies? A: Hexaware Technologies has been in our sell list earlier also. The stock went up and then suddenly made an inverted V-shape decline. Hexaware Technologies continues to be a selling opportunity, that decline is not over. We had a small bearish flag. That flag broke down in style yesterday with big volumes and a large range on the downside. One should look for lower levels here. It is very unusual to see an IT stock go against the IT index but Hexaware Technologies is doing that. So it is doubly bearish. Q: What is the call on Tata Chemicals for the morning? A: Tata Chemicals is a sell. It had a small upside rally, which was a bear rally in an ongoing downtrend. This is also a chart that is not doing what the Nifty is doing. It is going completely against it. We have a relatively safe opportunity to go short here. In a choppy market a lot of stocks become weaker, this is probably going to be one of them. Q: Siemens had a great run in the last one month, you would continue to back that one? A: Yes, I would. Change in trend is visible and we should be going long here. It is not just a day trade. If the trade is sustained, we would probably seek higher levels. _PAGEBREAK_ Q: At what point would you consider opening up a short position on the index? A: This is a matter about momentum. Momentum for example has been strongly in favour of the bulls. We have all seen that. So, short positions should not be opened in a hurry. The first short signal will probably come if the Nifty closes below 6,020. That will tell us that the lows of the last two days are not being held onto and a lower close has come. Even that would be fraught with high risk but at least short-term traders can then consider it. Q: The rupee has moved with some weakness today and you have been warning us about that for a while, any trade over there? A: Traders should be long on the dollar. That signal came two days ago and that continues. We are on the verge of a breakout. That breakout can come today or after ten-fifteen days. A breakout then should push the rupee all the way to 57 over the period of a few months. I have been bearish on the rupee that there is a trade. Even now you can be long on the dollar. Q: That will have some impact on IT stocks as well, how would you approach a name like Infosys today? A: Sometimes the relationship is not direct, sometimes it is. I would be a buyer in Infosys. We have to see IT in context. IT has fallen a lot, a deep correction has come about. So, perhaps even without the rupee, this would be a buying opportunity. Q: How about something like Reliance Power? A: Reliance Power is a buy. Reliance Power is also giving us mild signs of bullishness, bottomed out then rallied, the rally was similar to the Nifty rally. So at this point, the risks are low. It is possible to say, okay, we can consider going long in it. I think there is more upside here. Q: Muthoot Finance has rallied about 10 percent this week. Would you say it has got more upside to it or you would look to sell the stock? A: No, it has got more upside to it. We have to see the rally in context. It fell from Rs 250 to Rs 120. That was a 50 percent decline. After a 50 percent decline, what we are seeing is probably a relief rally and there are more legs to it. That means it is possible to buy and hope that it will go further. At some point, we should take profits. This is not the change of trend. It is just a relief rally. Q: What about a stock like Jindal Steel and Power Ltd (JSPL)? Do you see more pain there? A: Yes. JSPL has been coming in our sell list consistently and the stock has been falling. There is more downside here. It has not yet completed its bear market and we know when a stock goes in a bear market, it can do anything. So the risks from buying are much more. Q: What would be the approach for Sun TV Network? A: Sun TV Network is a buy. That is purely on trend but I would not buy it today. There has been a very sharp rally. Yesterday it saw some softness. The softness can continue. So, we need more dips or consolidation before we buy it again.