Mkt trend upwards; go long using Nifty Options: Sukhani

Technical analyst Sudarshan Sukhani, s2analytics.com told CNBC-TV18 that the market is moving in an upward trend. He expects Nifty to breakout of the narrow consolidation range that it has been moving in from the past three days.

He suggested traders to build long positions using Nifty Options. "This will bring some kind of safety and low risk," he added. Below is the edited transcript of Sukhani's interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee Q: How are you calling the Nifty now after the consolidation of the last couple of days? A: I am calling the Nifty on the upside. We had a big run up and after the run up the markets will naturally consolidate and that is exactly what they did. So far, markets are working true to form. After a consolidation where will the markets go? They always have this opportunity of moving up or moving down. We are in an uptrend, we will always favour the trend, I am assuming today, the markets will breakout of that narrow three day consolidation. Day before yesterday, we had suggested to build up long positions using Nifty Options, which would bring us some kind of safety and low risk. That view remains valid for today. If you haven’t done it then consider going long using Options. Q: Tyre stocks were very active. How would you trade Apollo Tyres? A: I would be a buyer in Apollo Tyres because it has given perfect buy signal. It rallied all the way to Rs 100 and then went through a very sharp and deep correction. Since each stock does its own thing, the correction in Apollo was surprising but in fact it told us that the price is now at a level, where you want to buy and go long in it. Today is a day trading opportunity for Apollo assuming the markets and midcaps remain cheerful. Position traders can build a position starting now. Q: Bank of Baroda is in your buy list today? A: Yes, Bank of Baroda is giving us the same pattern that Punjab National Bank and Canara Bank were earlier giving. It has made a trading range for the last two months and has broken out of that yesterday. Very clearly, PSU banks are going to outperform and these trading range breakouts are giving a message that they are just beginning a new up move. So, Bank of Baroda is the favoured stock for today because that breakout could give it a very strong momentum on the upside. In general PSU banks have been in favour, and I think that will continue. Q: Some of the textile stocks are actually making 52 week highs for themselves, how would you trade Century Textiles and Industries? A: I am not sure whether to call Century a textile stock or a real estate stock. I don’t know why they are making 52 week highs.  I am assuming this is the textile-real estate segment, stocks like Century, Raymond, Bombay Dyeing and Manufacturing Company. Century made these highs and then consolidated for the last six-seven days. This consolidation actually started prior to the Nifty’s consolidation but the message is the same that is there will be a big rally then consolidation and resumption of rally. So, Century should start resumption of that rally and I am assuming that will happen today, but I am also assuming that the Nifty will go up. Q: You have a sell on Petronet LNG Ltd? A: Petronet is a sell because it is a disappointment; the charts sometimes literally turn turtle and you have to listen to that message. Petronet was a favorite when it came down from Rs 175 to Rs 155. I thought that was a correction albeit a deep correction. Then a rally started but that rally has fizzled out. Apparently, the rally we saw from Rs 155 to Rs 165-162 was just a bear market flag and that is a  worrisome sign. It suggests that Petronet has much more downside before it completes its correction. Petronet is a short sell and traders must understand that short selling ideas, in an up trending market, don’t always work out. So, wait patiently for the market to show its hand in the day and if the markets remain choppy, then this is a very good trade. _PAGEBREAK_ Q: How about Tata Communications, it is also a sell? A: It is a sell. Tata Communications is also at new lows, so there is nothing in it. It has a similar flag pattern like that of Petronet but the comparison is not fair because Petronet is a strong stock. Tata Communications is falling now, and the chances are it will make new lows, as it goes on falling. It is kind of stock to a sell and forget. Q: You have a positive call on ITC this morning? A: I have a positive call on ITC because it is on the verge of making life time new highs and I think it made that yesterday. But if it did not, then it will do it today. ITC is going to be a major contributor in the Nifty going up and we have seen that happen every time the Nifty needs to be pushed up or does go up. So for both reasons, the Nifty is likely to be buoyant. ITC is giving the impression that it is breaking out of a range and making life time highs. Go for it in the intraday trade. Q: How would you approach a start in the green for the markets, still a good opportunity to buy? A: I hope traders are already long, I have been asking them to be long. But if they aren’t long then even now, 5-10 minutes of cooling period after the market opening, it is a good idea to go long. This market is giving us clear signs of breaking out. Q: At any point would you look to take profits or at this point you just keep with the market, keep raising stop losses and at any predetermined level, do not check out of your trades? A: No there is no predetermined level to check out. We took profits last Friday, when the markets rallied handsomely for two days back-to-back, so that’s the kind of move we are looking at. Traders should understand that the markets don’t work on levels, they are just approximates. Wait patiently for this market to give a big thrusting move. That is the point at which short-term traders should wait for the inevitable consolidation, since they have already made some money. Q: Would you buy the strength in metal names like Hindalco Industries? A: Yes but only as a short-term trader. It is a short-term play and a rally towards Rs 126-127 is likely, which was the previous high. So you use the dips and consolidations, to buy into Hindalco. Q: What about Indiabulls Real Estate that has also done quite well these last few days? A: Indiabulls has done very well and it was one of my two favourites, the other one being Housing Development Infrastructure Ltd (HDIL). Indiabulls still has potential for more upside. A move towards Rs 82-83 is possible. Yesterday, all realty stocks did very well and today, could be a pause. Traders should just time their entry but there is more upside in Indiabulls. _PAGEBREAK_   Q: How about Shree Renuka Sugars from Sugar? A: Shree Renuka Sugars has a confusing chart. First it fell and then broke a support level. I thought may be it is going lower but then it gave two big gains on the upside. In the short-term, the trade is to go and buy it. But in reality a chart that creates so much confusion can be avoided. Q: We haven’t spoken about this stock for sometime, your view on OnMobile Global? A: OnMobile was in a trading range. It is just coming out of the Rs 49-50 range and giving a promise of moving up to Rs 55. It is not a very good chart because the ups and downs that it has shown, tell us that there is some kind of instability. But for short-term traders there is a buy. Q: L&T Finance Holdings had taken a breather, is that beginning to move again? A: Yes it should move. I don’t think this is a day trading stock but for anyone wanting to buy, this is a perfect opportunity. It went up, came through a dip and now you want to get into it. The charts promise significant upside. Q: Technically, what did you make of the slide in Infosys yesterday? A: Infosys is so confusing, I thought the rallies would start but they haven’t. The IT index is actually falling in this market. On the charts, Infosys is a sell but selling a blue-chip like Infosys, in an up trending market, is not a good idea so it is an avoid. Disclosure: I do not have holdings in the stocks discussed.