Mkt promising good returns on upside; buy on dips: Sukhani

In an interview to CNBC-TV18, Sudarshan Sukhani, s2analytics.com shared his reading and outlook on market and specific stocks.

Also Read: Market volatile; avoid fresh positions till Nifty at 5950 Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: The prospect of the market inching up higher is because of good global cues, today do you see that taking place? A: The market seems to be suggesting a mild bullish bias and that seems to be working out. We are now coming close to a significant resistance level of 5,900. If the Nifty takes that out and closes above it and whether it does it today or tomorrow or on Friday is different. However, that would be a sign that we are willing to take another 100 or 200 points on the upside. That is a big if. Therefore, the short-term trade should be having bias on the upside.  Q: If the Nifty opens with 320-40 points gap up would you still buy that or would you wait for a bit of an intraday dip to buy? A: If it opens with 40 point gap then do not buy, wait for intraday dip because that dip will certainly come. If it opens flat, as it is possible and that’s what the SGX is suggesting then wait patiently for the first half an hour to elapse and that is a matter of trading strategy and then if the Nifty decides to begin an upmove that is the time one should enter. However, in any case a large gap is not to be bought into because this is not a run away market. It is market that is promising better returns on the upside. Global mkts in positive mood: Will Nifty retest 5900 soon? Q: Why are you selling ICICI Bank today? A: Because banks are now divided in two parts. There are banks that are showing good charts and there are banks that are showing bearish charts. We focus on the individual banks where selling is possible and we continue to sell. There is no assurance or guarantee that this market is going up. So, we take the strong ones to buy and take the weak ones to sell. ICICI Bank unfortunately continues to be weak. It keeps on drifting lower and it is breaking support levels. It is a short sell. Independently it is also possible to go long in the Bank Nifty -- that is a separate trade -- and go short in ICICI Bank, which starts weakening in the morning and they are not pair trades but independently both of them could work. Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed. _PAGEBREAK_ Q: This week will be all about IT earnings, Infosys will be in focus this week and next week of course, but you are choosing to buy Wipro, what is the target over here? A: Wipro has been in an uptrend. We have been recommending buying in Wipro for sometime now. The stock was in a trading range and it is breaking out from it. Day trading target is Rs 370 but I would assume that Wipro is probably moving much higher. So, it is not only Wipro, it is also that most IT stocks, all five IT majors, suggest bullish patterns. We do not know what will happen on July 12, 2013 and how this will finally pan out, whether this will work or fail but for today, I would say that the strength that we are already seeing in Wipro is likely to be build on and go long. Q: Yesterday we saw quite a bit of participation from the pharmaceutical names as well and Dr Reddys Laboratories (DRL) in particular has had a very good session in the last couple of days. You would buy that again? A: Yes, I would buy DRL again. It has been making new lifetime highs. We have been bullish on it, going long, giving it in our morning recommendations. Yesterday, it reached that lifetime high level. We have seen what happened with Sun Pharmaceutical Industries, it just went on going up. So, we do not question how high it can go. We just say momentum is strong, there are buyers here and we want to go with this momentum. Today, after the first cooling off period, if DRL starts going up, go for the ride. Q: Oil marketing companies (OMCs) have a bit of a double whammy right now, crude is going up and the rupee is depreciating. You also have a technical sell on Bharat Petroleum Corporation (BPCL)? A: The technical sell has much lower targets. We are discussing here day trading targets, but BPCL fell sharply and then moved up and that upmove was a bearish flag. It has broken down from that bearish flag suggesting another 50 points down is possible from here. That is not a day trading or a swing trading target. However, eventually a person who is taking a position in BPCL could simply hold on to short positions assuming that much lower levels are coming. It is very disappointing but that is the way charts behave. Q: You also have a call on Asian Paints today. That stock has been very volatile in the last couple of months but for the day, you would buy it? A: Yes, I would. Asian Paints had a correction. That correction took the form of something that technical traders will recognise as an ABC correction, which is over. That suggests us that a new uptrend is starting. I would not be surprised if Asian Paints eventually made lifetime new highs again. It has been doing that earlier. However, that is what the momentum is suggesting and chart patterns are saying. So, in spite of yesterday's gains, the chances are that we will build on them today or tomorrow. We just want to be aware that the trade is available today. Q: From April onwards CESC has been in a very strong upmove. Do you expect that to continue? A: Yes, I would expect that to continue. What this market has been doing from the last one year is to reward strength and penalize weakness. It is not a buy on weakness or a buy the falling knives market. That seems to be continuing. So, this is a stock that has been rewarded repeatedly for the stock price performance. That should continue. It has just made new highs for this current up leg, not lifetime new highs, which suggests there is strong momentum and we would be buyers here. Q: If we do see the Nifty opening at 5,860 levels, would you maintain a positive bias and what would the approach be for the day? A: We will still maintain a positive bias. The sense is that today the market should see a breakout of some kind. This could easily be a breakdown because it is not easy to say where the market will go but a reasonably large move seems to be coming, the market have been in a trading range and some kind of a big move is expected. Therefore, wait for first 15-20 minutes for the market to cool off and then buy if the high of those 15-20 minutes is taken out on the upside. The bias is mildly bullish so we will take a long call. If the market does not perform, starts falling down in case in the unlikely event then there is no trade. _PAGEBREAK_ Q: Reliance Power had a strong session yesterday, what is the call for today's trading session? A: I would not be a buyer here. The theory is that after two big days the stock will consolidate. It is a buying opportunity, but not necessarily today. Let the consolidation happen and then Reliance Power becomes a buy. Therefore, while we classify it as a long call, it is not a good strategy for the day perhaps for tomorrow for the next day after a consolidation it certainly becomes a good strategy. Q: How would you trade IndusInd Bank ahead of its numbers? A: On theory it is a buying opportunity, the stock has made higher highs-higher lows, finished a correction, renewed its advance but in practice there are two reasons; first, we are in front of news reports and second, IndusInd Bank has already rallied. However, smart money has anticipated good news and has completed the rally. Therefore, in either case I would take a position only after the results. If after the results the market begins to go up, the stock price goes up then I would be a buyer. Q: What is your call on Havells India? A: It is a stock we want to buy but not necessarily after these two days of big runs. Normally, stocks are bought when they are quiet, not when they are excited. After this excitement let Havells become quiet again. It keeps on coming in our buy list. We buy it when it goes into a range, not after two-three days of big moves. It is a buy but not necessarily today. Q: Do you think Jindal Steel and Power (JSPL) could be a selling opportunity today? A: Yes, it is. The downtrend has resumed, keep a stop loss and assume that this market will keep on coming down. This stock could easily breach Rs 200 eventually. Q: Your view on one of your erstwhile favourite stock, Indiabulls Real Estate? A: It is a buying opportunity. It is giving the first sign of moving up. There is a pattern of higher lows. The pattern of higher highs has not come otherwise would have been much more upbeat on it. However, there is reason to buy it today. If it doesn't work out, it doesn't work out. All trades are not expected to work out. Q: For the slightly medium-term do you think this market is going to resume its downtrend? A: Eventually, I think so. This breakout above 5,900 could occur today, it could take us through 6,000-6,100. I do not know. We will just follow the momentum but eventually the bear market or the downtrend that had started earlier is not complete. I would expect the market to break 5,580-5,560 levels and go lower. That may occur in July, it may occur in August, we do not know that yet.