Take fresh positions post RBI policy: Sukhani

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

Rally may fizzle out; Bata, Crompton good bets: Religare Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: How will you approach the market today? A: We are approaching significant resistance levels. There is a band of resistance between 5,940 and 5,970. That resistance is unlikely to overcome soon unless something unusual happens with the Reserve Bank of India (RBI) policy. The Bank Nifty is the joker in the pack. It is overbought and giving signs that it is willing to go through a correction. Therefore, my sense is that the momentum still favours the bulls but we are entering an area of a lot of caution and trading should be tempered down. Wait till Friday and then take fresh aggressive positions. Till then let the Nifty go up 20 points-10 points. Just take day trades. The momentum is going to continue or not. That question will be probably decided on Friday.    Q: You have picked HDFC Bank on the buy side today. A: HDFC Bank has been a relative underperformer after the big rally that it saw, for three days it has been in a trading range. A trading range for any up trending stock is usually resolved on the upside so maybe some other banks will not participate, this shifting will keep on going. However, today I am assuming that HDFC Bank can give us a breakout on the upside after narrow ranges so one should be buying it. Q: You would buy Bharat Petroleum Corporation (BPCL)? A: We have been bullish on BPCL, in fact on both Hindustan Petroleum Corporation (HPCL) and BPCL. There was a very significant rally from Rs 360 to Rs 415 then BPCL went into a hurdle. That is expected. There is a big rally then a trading range then a resumption of that rally. That should happen with BPCL or it started the rally with a fairly decent basing pattern so there is no need to get worried about it. I would be a buyer, we are anticipating a breakout. If it does not come today then it should come on Thursday. However, be on the long side. Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed. _PAGEBREAK_ Q: Not just the banks but even the non banking financial companies (NBFC) are propping up on your sell list. Let us start with PTC India? A: PTC has been very disappointing chart. It is also not a very widely tracked stock but it is in the Future & Options (F&O). However, the stock is now breaking down, it made a small rally and that was a bear market rally in an ongoing uptrend and then it broke down yesterday from that small rally giving the impression that it was a bear flag. Lower levels should be expected. It seems like a relatively easy short, nothing is easy but it seems so. Q: You would buy Dr Reddys Laboratories again? A: Yes. Two days of narrow ranges, two days of confusion after the big rally and the Nifty itself is in a narrow range for the last two days. The SGX suggests, it is going to breakout on the upside, but that is almost exactly what I expect some of the good stocks to do. Therefore, Dr Reddys is a buying opportunity. Do not worry about lifetime highs, they should be bought into. Q: You are not optimistic on Future Retail? A: No. I should have been. It is trying to build a base. The rally in Future Retail for the last six-seven days hardly moved, it just took a price up by few points and that is nothing; midcaps were doing well, largecaps of course were doing exceptionally well. Future Retail has not done anything and then it fell yesterday from that rally suggesting perhaps it is going to continue doing a basing pattern or even go lower. Therefore, short sell it or do not buy. I would prefer to say one can sell, look at day trade at least on downside. Q: What would you do this morning with Hindustan Unilever? A: On Monday afternoon I had recommended buy after the 3-4 percent rally on the back of results and I had given a target of Rs 1,000 in next two years. However, it is going to reach there before two years. One cannot buy this stock after 10-12 percent rally, but for traders as well as investors, one want to be in this. Therefore, wait for inevitable consolidation, still be long in HUL. Q: What about the Nifty for people who are long. If the market goes to 5,950 would you advocate taking profits or just raise your trailing stop loss, but not abandon the market yet? A: Our stop loss is now at 5,850 and that the stop loss will remain there, but for most other traders my suggestion has been to divide trading into two parts. One is a stop loss 5,850 trade and the other is intraday trade, buy on inevitable intraday corrections, we get them everyday, small dips, small consolidation and then take profits the next day on gap ups. This market is giving only running correction but one should be on the long side. One should also avoid the Bank Nifty. Q: Any other stock in fast moving consumer goods (FMCG) space that you want to play? A: Yes, Marico.