Intermediate mkt trend on downside; trade intraday: Sukhani

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

Mkts to remain volatile and rangebound; avoid HUL: Experts Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: The cues are mixed from across the globe but for our market it was terrible yesterday, how would you approach the Nifty this morning? A: There are periods in the market when there is a complete sense of confusion. This is one of those periods and it is little frustrating but we have to accept it. The broad intermediate trend is down; there is no confusion on that, we are going to go lower. However, the short-term trend was up, we saw how the market rallied with big gaps, big ranges on the upside, reached 5,900 and then yesterday the short-term trend was put in difficulty. So, there is a sense of confusion on the short-term trend, on the move that we saw yesterday, was that a correction of the upmove or was that the beginning of a new down move. Therefore, at this point it is difficult to answer that question. We are in a long-term intermediate downtrend and it is possible that the upswing may well be over. We will have to wait for more evidence from the market to tell us whether the upswing is again getting renewed. I am assuming that this upswing has big barriers at 5,900, let the Bank Nifty cross the first levels of 11,750 then we will start looking at building long positions again. Till then trade intraday.  Rupee will see 60.76/$ if FII inflows dry up: BofA Q: How do you trade intraday, what kind of an opening will set up what kind of moves for the day? A: The intraday trades should be taken after the first 15-20 minutes of the opening price. Ideally we want to sell into strength. Therefore, if the Nifty rallies 20-30 points from the open then that is a selling opportunity and if it dips 20-30 points and it may during the course of the day then that becomes an excellent buying opportunity. Try to close all positions by the end of the day. Today the US is closed and market could just drift for two days. Q: You have a buy on Tech Mahindra, what are the levels you are looking for? A: Yes, we had some dips in Tech Mahindra for two reasons; one, it was over extended and second, there is something about a swap ratio, which I do not understand. However, I understand that it caused a dip and that dip is now coming to a very strong support level. Tech Mahindra has strong support at Rs 1,000; the stock itself has broken out of a long trading range and so the stock is not coming down in a hurry. The support should hold, which means today we want to buy Tech Mahindra, all the stories behind it are over and the reasons for the dip. Therefore, if one is a position trader or a swing trader and do not necessarily want to day trade and want to hold position in Tech Mahindra then both are justified; intraday trading and holding a position on the long side. Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed. _PAGEBREAK_ Q: You have picked Sun Pharmaceutical Industries on the buy side today? A: It is one of the better stocks. It had a correction and that correction is over. However, when the Nifty was going up Sun Pharma was actually moving in a narrow range that is because that was a momentum driven rally and defensive stocks become laidback but yesterday Sun Pharma actually gained on a day when the market was down. Those gains should now be built upon and Sun Pharma should easily see its earlier highs and eventually make new highs for itself. It is a very strong stock so today is an excellent day to buy assuming that a breakout is occurring. Q: You have a sell on Oriental Bank of Commerce (OBC) but yesterday's terrible performer was Bank of Baroda, in fact a large number of banks did very badly yesterday. So why are you preferring Oriental Bank as a sell over other equally competing candidates and what is your view on Bank of Baroda (BoB) as well? A: Bank of Baroda was the worst performer yesterday and it broke below all kind of support levels and because it did its bit yesterday we are looking at a public sector undertaking (PSU) bank where there is more potential for a downside today, not over the next few days then BoB would have been an ideal candidate because a stock that breaks much earlier support levels is going to go down. Today's selection of Oriental Bank was mainly because Oriental Bank can do today what BoB did yesterday. It had a rally and then it had a sharp decline, it is on the verge of breaking down its support levels. Q: Is it better to buy defensive names in a market that is so volatile like Dabur India that you have picked up today? A: Yes, it is much wiser. Some stocks are going up. Dabur is like Sun Pharma; of course they have different businesses but Dabur is doing the same chart patterns; a rally then a very minor decline and that decline ended up in a trading range, it is on the verge of breaking out. We have given a call on Dabur earlier also but that breakout did not occur. It didn't fall. It just stays where it is. We are assuming that today the stock could breakout, there is no rush. If the stock starts inching up from yesterday's highs then go long immediately. That is the first sign that the breakout is happening.  Q: Would it be dangerous to play in Lupin? A: It is not dangerous. It just not necessarily today's trade because after big rallies the stock should consolidate. We are buying Sun Pharma after a consolidation. Let Lupin do that. It will become an excellent trading opportunity again. Q: You foresee more downside in Raymond today? A: A 30 day decline and then a three day rally and that rally dissipated yesterday when it gave up all minor gains of the three days. It has also broken down from Rs 250-255, a strong support level. It is very worrying where it is going and all these were momentum stocks, they could do no wrong about one year ago and they are doing everything wrong now. Raymond is not just a day trade; it is also a positional trade. It is going much lower. _PAGEBREAK_ Q: You have a sell call on IRB Infrastructure Developers? A: Yes, with some regret because IRB Infrastructure was giving signs that it is bottoming out. It has not done that. It has fallen, broken a support level. Last support level is now going towards Rs 100 and crossed Rs 100 on the downside. It is worrying how IRB's Rs 100 support has broken completely. We cannot say where it will go but the call is that it is going much lower. Q: Bajaj Auto was under pressure yesterday because of fundamental brokerage worries but technically how would you approach it? A: I would be a buyer. This is a small minor dip after a sharp rally. Dips in strong stocks have to be bought into and so there is no confusion on that. One should be looking to buy it today. Q: How are the charts of Shriram Transport Finance Corporation looking? A: The charts are horrible. They have already given a confirmation of a distribution pattern and it is heading lower. On a day-to-day basis maybe yesterday was an up day, but I would be using any strength to go short in it. Q: How would you trade Punjab National Bank (PNB) and Bank of India (BoI)? A: Both are short selling candidates. PSU banks are in miserable position as per their charts. I do not see any reason to buy them. Therefore, the only question is one of tactics. Do you sell at the open, do you sell today at all, you want to sell when the stocks consolidate intraday and then start breaking down. That is the easiest way. If they become flat after any rally or decline, consolidate. Sell it, even intraday trading is worthwhile. Q: What is the trade on Jaiprakash Associates today? A: It is going down. There was a one-two day rally. That rally was nothing compared to the earlier decline. An immediate target of Rs 46 is possible here. Try to sell it. Q: What have you made of Bharti Airtel? A: I would be a buyer in spite of yesterday's decline. Yesterday's decline was across the board, everything in the Nifty should have declined yesterday. Bharti is now making a small double bottom, but still something visible and clear. Telecom by itself is a good place to be in. It is underperforming the other two but it might play catch up. I would be a buyer here.