Nifty in for 5700; look for buying opportunities: Sukhani

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

See Nifty at 5800-6100; eye pharma, pvt banks: Dalton Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: You were looking for a bit of a buying opportunity in trade yesterday. Would you say with the kind of close we have had that the short-term move for the market or short-term trend as well seems to have turned negative? A: I was looking for a buying opportunity that hardly came in, the market drifted down. The short-term buying opportunities are still there because market is deeply oversold. Therefore, on a very short-term timeframe; couple of days, today, tomorrow or three days, the better trade would be to buy a bounce whenever it occurs. The intermediate trend is down and there is no confusion on that. So, we are only trying to trade a correction on the upside. Corrections are difficult to trade, but still they are available to short-term traders. For the intermediate trend, the view has never changed, we have broken down all kind of support levels and we are going towards 5,700. For the short-term trader trading for today or tomorrow, wait and look for buying opportunities. That will be more rewarding.   Q: The big crack came in the auto stocks yesterday. You would sell Bajaj Auto today? A: Yes. Bajaj Auto is a short sell for the short-term trader because it is not a positional short but that does not matter. For somebody, who is looking for a couple of days or even a day, Bajaj Auto suggests that the decline that started yesterday is likely to accelerate or continue with momentum today. So, it is a very nice short selling idea. Take a position in Futures and just wait patiently for targets to come. Q: Banks have been looking very shaky as well. You have picked out Vijaya Bank to short sell today? A: Banks are coming in my list all the time. Since it is not a wise idea to only trade banks, one really needs other short selling ideas. Vijaya Bank has done what other public sector undertaking (PSU) banks have done. It has confirmed the bearish head and shoulder, broken down from it and is likely to head lower. These patterns usually meet their targets, which in case of the Nifty also is 5,700 and in case of individual stocks, it is the same. Therefore, Vijaya Bank is a positional short. Initiate the short today and so far as it goes your way, continue with it. Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed. _PAGEBREAK_ Q: Exide Industries is a buy this morning? A: Yes that is a buy. Exide is doing something very different from the market. The market has fallen from 6,100 odd to 5,900, but Exide has done nothing, it is flat, it has been sideways. A stock that does not respond to market decline is a very nice stock to own, not only for the day trader, not only for the short-term trader, but also for people who are building positions. It repeatedly finds support at Rs 135, which then becomes benchmark for saying that so far it is above Rs 135; we can expect a big move anytime. We want to go long because the big move seems to be imminent. Q: You have a buy on United Spirits? A: United Spirits has been on a roll. Last four-five days it was in a narrow trading range making some kind of a flag. That seems to have broken out yesterday, not in style, but mildly. The fact that a small correction is over, it is resuming its uptrend suggests that one should be long here. In this case even the context is not important otherwise we say look at the Nifty, when the Nifty gets stable then go long. However, United Spirits could do its own thing irrespective of what the Nifty does. So, it is a very interesting idea, just watch it. If it is stable, go long. Q: You would buy the classic defensive today, Dr Reddys Laboratories (DRL)? A: Dr Reddy's Laboratories is a buying opportunity because same pattern as United Spirits; five days of consolidation. The Nifty corrected 250 points but DRL consolidated. That suggests that the next move here is going to continue to be up. This consolidation probably could easily breakout today. In a choppy market what will go up, the stocks we are discussing like Dr. Reddy's, United Spirits. These are so-called defensives and they are the easiest to go up. Q: How would you trade NTPC? A: NTPC is a disappointing chart. It had a strong rally and that rally seems to have fizzled out. It is already making a pattern of lower highs-lower lows. For two days now it has been trying to cross Rs 155 and failing to do so. Therefore, we are taking advantage of strong resistance at that number and saying that we can be short with more than Rs 155 as a stop loss and if the lower high-lower low pattern continues then it should go much lower. Q: What kind of indication are you getting from the Bank Nifty? That seems to be wielding the most pressure on the market, on Friday and yesterday's session? A: The Bank Nifty is the weakest of the lot and we were bearish on the Bank Nifty even before Nifty came into play. However, the chances are that a much lower target is available on the Bank Nifty. It will reach its pattern targets. Most banking stocks are short selling ideas, in fact even corrections in banking stocks play on the long side. They will be but they are little more difficult. We have two completely divergent views now, the CNX IT appears to be strong and the Bank Nifty appears to be the weakest. _PAGEBREAK_ Q: For an intraday trade what kind of levels would you be watching for the market either on the upside or in terms of confirming whether another short trade can be made? A: It is going to be a day of confusion today because we have fallen a lot and to expect the market to go even deeper without a bounce is difficult. So, for intraday trading my levels are yesterday's close, anything below 5,930 would be a no trade zone, which means that I would not go long there. If 5,930 hold, my trade here would be to try if I can take an intraday long. These are just intraday; otherwise a positional short continues to be maintained. If there is a strong intraday rally then only I will sell into the strength otherwise I would not sell a breakdown. Q: How would you approach Shriram Transport Finance Corporation? A: I would be a buyer. We have been bullish on this stock for a long time and that has been justified. Shriram Transport is in a narrow range for the last four days. A breakout on the upside is possible. If that happens, we will buy. If that does not happen then nothing is to be done. Q: How would you trade IDFC? A: IDFC is a sell. It has made double top, broken down from it. That is not unusual because a lot of stocks are breaking down. This does not change the long-term bullishness of IDFC, but for a short-term swing trader it is a selling opportunity. Q: Any strength building on Anil Dhirubhai Ambani Group (ADAG) faces like Reliance Communications again? A: Only on Reliance Communications so we cannot put that in the entire ADAG pack, everything else is to be avoided or to be sold into. Reliance Communications is in a trading range and that big upmove suggests that something has changed fundamentally for the stock; at least technically it is in a strong uptrend. I would be a buyer here. Q: How would you trade Jain Irrigation Systems? A: I would be long. It is coming in our buy list repeatedly. The stock has bottomed out; build a base, broken out from it and that base building process took months. So, this will be stable on the upside. Q: How would you approach Hero MotoCorp? A: We had a big down day yesterday but one must keep that in context. That down day came after one-and-a-half month of a strong rally. So, Hero MotoCorp had bottomed out, it then built a small base, broken out from it and obviously, nothing can go up forever. My point in explaining this is because I would be a buyer here so the background was essential. One down day does not change the overall short-term trend of the stock. It is still in an uptrend. Q: Your views on Oil India? A: Oil India is a sell and the reason it is a sell is not because of Oil India; the stock is giving the first sign of a breakdown, not a deep breakdown but still a breakdown. It is also a sell because of Oil and Natural Gas Corporation (ONGC) and ONGC has confirmed a bearish pattern and that is worrying. ONGC is also a sell because it is giving a strong sell signal. Q: Are you still holding your short position on the rupee? A: Yes. However, now we are at 57/USD, almost there and that is an area of strong resistance for the dollar. So, if we do not cross that hurdle in the next few days it will be a good idea to close the position and wait for the next breakout above 57/USD. Eventually, for a person having a longer term view, there is no need to exit and entry, just maintain a short position on the rupee and expect 62-61/USD.