Have patience, Nifty will move soon: Sukhani

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

Below is the verbatim transcript of an interview aired on CNBC-TV18. Q: There is no joy yet in trading the index? A: Yes, no joy yet and it is also getting a little choppy. The idea yesterday, just before the close was that the market is holding on to support so maybe we should take some long positions. That may not work out in the morning so we will wait for an hour and if the market do not respond to support then the positions will be closed and we will come back to a flat situation in the Nifty and in the Bank Nifty. There is nothing there that justifies taking a long or short in any case. It was just a trade. Therefore, the focus remains on the individual stocks but the markets will not stay at standstill situation for long. We just have to have the patience. A decisive break below 5,950 levels by afternoon will give us impetus to take short positions. Q: You are going short in big names like Larsen and Toubro (L&T)? A: Yes, in fact there were other big names and I thought if I become so bearish then what will the Nifty do. The charts are not very conducive because a lot of the banks are also cracking down. L&T has been in a steady decline, nothing has been cheering up the stock price. It seems that a much stronger fall is imminent. Therefore, L&T is a short selling candidate, not just for today, it is also a short sell as a position trade until the Nifty does not start doing something else.    Also Read: Govt spend in infra space to pick up: L&T's Raman Q: You are short on Sterlite Industries from the metals basket? A: Sterlite is a positional short. We have discussed it a few days ago also. It made a bearish pattern. That was a distribution after a very small rally. It did not have a big rally but whatever it had that rally ended with a distribution pattern, a bearish head and shoulder is been confirmed. The stock price is now moving down, broken down. That breakdown is likely to be increasing as days go by. So, not just for today, it is also somebody who wants to buy a Put or take a positional trade on the short side; Sterlite is quite decent in that respect. Disclosure: I have no holdings in the stocks discussed. _PAGEBREAK_ Q: Rural Electrification Corporation (REC) had 7 percent gain in three days. Do you think it is good for more? A: I think it is good for more. Yesterday we had a very nice price bar for REC. It closed at the highs of the day on a day when the market were literally doing nothing. It is supported by its associate company, Power Finance Corporation (PFC). Therefore, both of these stocks normally go together. REC and PFC have embarked on their bull markets and that is not surprising, because they belong to that Non-Banking Financial Companies (NBFC) group, which is doing very well, which is likely to outperform the market distinctly. So, I would be a buyer in REC. If the Nifty does not crack then some stocks will go up and REC is likely to be one of them. Q: UltraTech Cement is in your buy list today? A: This theme was discussed earlier also when we had Ambuja Cements in our buy list. Cement is now bottoming out. I would not be surprised if the market remains choppy and cement stocks will actually start moving up. Whatever correction they had in terms of price and time both seemed to be over. Cement has been sluggish for quite a while now. So, even the time correction is over. Cement is a buying opportunity. A stock like UltraTech is not really a day trade. I put it because it is possible to buy it. Hold it for a few days and get gains out of it. It is a nice idea. Q: Zee Entertainment keeps coming back in your buy list? A: Yes, because it keeps going up and it is on the verge of a breakout to new highs. This stock has literally doubled itself. It does not give any signs of stopping and in a market where there is so much uncertainty it is far better to stay with the stocks that are giving us a clear message that trend is up, we are going to continue. Therefore, Zee is a buying opportunity. I think it is also a position trading opportunity, not just a day trade. Once these breakouts happen much more upside is possible. Q: You have a sell call on Siemens today? A: The theme is that capital goods are collapsing. We have seen Bharat Heavy Electricals (BHEL), Larsen and Toubro (L&T) as sell and Siemens is a sell. The same pattern that we are seeing in L&T is now getting started in Siemens. A large rally, the top of that rally then eventually ended up as a distribution and the distribution has given and broken down. Siemens’ charts appear now to be very bearish, almost like BHEL. Q: Your view on the index? A: The index is weakening and that seems to be the pre-opening message. Traders who have any kind of long position should exit after the first 15 minutes, which is what I would do; any weakness in the initial hour suggests that now we should start taking short positions. This is not an easy market to trade because it is extremely choppy, after taking a short position it is also possible that the markets can reverse themselves. Therefore, keep volumes low.  _PAGEBREAK_ Q: What about Mahindra Satyam, which has started picking up in the last couple of days? A: Yes, it has and after a three-four day correction it is doing well again and so in Tech Mahindra. I think Mahindra Satyam is a buying opportunity. There will be some stocks that will go their own way and both these twin suggests that a good uptrend is likely. Q: What about Mcleod Russel from tea stocks? A: Mcleod Russel has an excellent cart and after the rally it consolidation for one-and-a-half month and that consolidation is probably going to lead to another upmove. That is the chart pattern suggestion and it is quite possible. Tea does its own things; sometimes it is unrelated to the Nifty. So, in either case it is uncorrelated stock to be in. That’s a wonderful place. Much higher levels are likely and eventually it should touch Rs 400. Q: Would you buy a stock like Balrampur Chini Mills? A: No, I would not buy it. The chart suggests a buying opportunity. Therefore, those who are thrilled with the idea that sugar is offering an opportunity of trading; there is a trade here on the long side. Sugar has deceived so many times; it is not worth going into. However, there is a change of trend, which is perceptive. Q: Your thoughts on Steel Authority of India (SAIL)? A: There is nothing in it. SAIL has been falling consistently. It is not just one day; it has been consistently falling for the last one-and-a-half month. The market understands something that we do not. Yesterday’s big decline is a message that more is coming. So, either go short in SAIL on any rally or avoid it. There is no falling knife catching here. Q: How about Petronet LNG, which lost a bit of ground yesterday? A: Yes, another disappointment which is the message. So many midcaps are disappointing. Petronet is not just yesterday; it broke support levels earlier, which should have held. It was a wonderful stock to be on the long side and it has been continuously falling down. So, either a short or avoid. There is no way we can buy it. Q: Your view on Coal India? A: Coal India was a bearish pattern earlier. It was in our sell list and that continues. There is more downside here. It is a heavyweight, it is a largecap stock. However, that does not mean anything. The charts are suggesting that lower levels are likely. We will find out whether it’s Rs 320-330 but yes, it is going down.