Nifty stuck in 150pts range; buy on dips: Sukhani

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

Rupee fall, high crude prices double whammy for mkt: Expert Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: Wishy-washy session yesterday, today there is some global green but how would you trade it on the index? A: The index is now in a trading range. Trading ranges are vicious, choppy and difficult to trade. We have seen how the market fell yesterday and then throughout the day it continued its rally after the decline and today the SGX suggests a higher open, but that means nothing, we still remain in the range. A decisive trade will come if the Nifty crosses 5,900 and closes above it or on the downside it goes below 5,750. This 150 point range is treacherous and the trade for the day is to expect a choppy market, which means from the open if the Nifty rallies 20-30 points then look to sell it and the reverse if it fall 20-30 points then look to buy. It is easier said than done but there is a scalping trade here. I do not think one should take bigger positions till these levels are taken out one way or the other. Q: You have sell call on Kotak Mahindra Bank? A: Yes, banks are going lower and the Nifty is going higher. It is not going to sustain. One of them has to catch with the other. Kotak remains in our sell list because all banks are giving signs of breakdown except one or two and Kotak is one of them. It was a bluechip, had a smart rally and now is persistently breaking support levels. The last support level was broken yesterday. Kotak at Rs 690 is heading towards Rs 650 or even Rs 600. Things can change if Nifty turns around, the Bank Nifty catches up. However, for the day I would be a short seller in Kotak Mahindra Bank. Q: You are also selling Dish TV this morning? A: Dish TV has a horrible chart. The bull market is over. A bear market in it has started, at Rs 57-58 it is ready to make new lows. New lows invariably are bearish. The point is that in a choppy market some stocks will go down and the easiest short sells are the weakest ones that exist. Dish TV is certainly a very weak stock. Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed. _PAGEBREAK_ Q: Century Textiles and Industries is also a sell in your list? A: It's been a favourite sell. It keeps on going down; lower highs-lower lows and now it is on the verge of breaking its last lower low and then it goes into uncharted territory on the downside. It is a short sell not just for the day but traders could sell it and carry it for few days. Q: You have a buy on Zee Entertainment? A: Zee has an excellent chart. There were corrections but the corrections were mediocre or tepid to say. It fell and then found support at the Rs 215-220 area, it rallied again. It is in a trading range but that trading range is taking the shape of a bullish head and shoulder pattern. Zee is in a strong uptrend. Therefore, in a strong uptrend when a bullish pattern seen then it is a buying opportunity. Today in a choppy market Zee should be one of the outperformers and for people willing to take positions, buy Futures or equity in Zee and hold on to it. Q: You are also buying Apollo Hospitals Enterprises? A: It is a different story. Apollo Hospitals is in a trading range but it has been a smart outperformer for many months now. Therefore, after a big bout of outperformance the stock will go in a range and consolidate. The consolidation comes at rest at the lower levels of Rs 950, which is where Apollo Hospitals is. If this is support and it has been proved to be support many times then a bounce to Rs 1,070 is also possible. Since it is standing exactly at support for today, one should anticipate the beginning of a bounce and buy it. It is not in the Futures and Options (F&O) list but there is no harm in taking cash position. Q: Infosys is also in your buy list from the largecap space? A: It is a brave call. It is not easy. It's reporting on July 12 and I have a buy on Infosys today. However, its chart pattern suggests a bullish head and shoulder breaking out of it. Therefore, market is certainly anticipating that something good or nothing bad will come out of Infosys and even if nothing bad comes out IT stocks are bottoming out, all five of them including Tech Mahindra. Infosys is giving an attractive chart patterns and so are the others. So, for the day, be bullish on Infosys rather than buying Futures or equity buy Calls, which is much easier to trade in. Q: Your opening gambit on the index? A: The market is choppy and in a choppy market it is difficult to decide on a trading strategy. However, the strategy still is that if the Nifty goes higher by 20-30 points intraday then that is a short selling idea, somewhere around 5,860-5,870 and if it falls 20-30 points from the opening price, not from yesterday's price then there is a scalping trade on the long side. This is not very comfortable but this is the best we have and the big trade will come if the Nifty decisively crosses 5,900, which is a long trade or goes below 5,750, which will be a short trade. _PAGEBREAK_ Q: What do you do with the Bank Nifty now? Would you still be short or do you think it is a dangerous trade to be carrying shorts after the kind of profits you would be sitting on already? A: We are still short and it is true that it is a dangerous trade in the sense if the Nifty starts pulling above 5,900 then it will probably carry the Bank Nifty with it in someway or the other but evidence has not yet come. Therefore, I would be comfortable carrying a short trade in the Bank Nifty. I assume each trader would have a stop loss of some kind, which is a different issue but about 11,600 would be the stops for the Bank Nifty.  Q: How would you trade Tata Motors? A: It is a choppy stock. It went up, went down, reacting to news but if one want to take a view it will be a sell. However, as a matter of tactics I would not touch it because it is getting very prone to news rather than charts. Q: Anil Dhirubhai Ambani Group (ADAG) stocks have not done badly last week. What about Reliance Power? A: It is a nice chart. We want to buy it. ADAG stocks have done remarkably well and all of them have developed bullish patterns and broken out of it. Therefore, it is uniform. Reliance Power has done the same thing, made a bullish basing pattern, a bullish head and shoulder, broken out, it is a long trade. Intraday traders should look for a consolidation and go long and for anyone else take a positional trade. Q: How would you trade Hexaware Technologies? A: It is a buying opportunity. There is a target of Rs 99 or even Rs 100. It came out of a base. The stocks that build bases are usually stocks that will last longer in the upside momentum and that is what Hexaware is doing. I would be upbeat on it. It has been seeing big gains so the entry should not be immediately but rather on an intraday consolidation. Q: LIC Housing Finance had an ordinary session yesterday; do you sense a breakdown happening in some of these non banking financial companies (NBFCs) as well? A: It is breaking each and every support level and is now promising a downside target of Rs 214 even Rs 212 or Rs 210 for the short-term traders. There is more downside here. It would be a short sell. A lot of NBFCs, for example Shriram Transport Finance Corporation, LIC Housing, SREI Infrastructure Finance have broken down. Q: Your views on HCL Technologies? A: It is buying opportunity. It is making new highs, it is coming out of a long base and that was a consolidation after an uptrend, it wasn't a dip. However, the consolidation has again broken on the upside. There is a theme, most IT stocks; IT majors are suggesting that they are beginning to start upmoves. Q: Do you fear that a break out of this range might eventually turnout to be a trap as well, for some reason the Nifty goes beyond 5,900, you enter a big positional trade and then the market whipsaws and plunges back down. Is there a fear of that? A: That is a very big fear because beyond 5,900 we have to go long and it is a nightmare. I am almost certain that it will become a trap and we are going to get trapped in it. However, as traders we have no option but to go long if there is a breakout.