Current bull run will fizzle out soon; buy on dips: Sukhani

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

Also Read: 5600 decent support for Nifty, says Sandeep Shenoy Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: We covered quite a bit of ground on the Nifty. Is there still potential to play a long trade even intraday on the market or would you approach with caution after Friday’s move? A: We wanted follow-through and the follow-through came rather dramatically on the upside, certainly beyond expectations, but that is the market. However, the short-term trend is up so intraday trades should be taken on the long side. Yes, there is potential, certainly for intraday traders to buy on dips, buy on consolidations and expect the market to give at least intraday moves on the upside. The bulls are in control for short-term time horizon and that control will not be let go easily. So, it makes sense to be on their side. For the intermediate timeframe, trade still exists, people who have bought Puts for July can easily hold them; there is no stop loss because the Puts themselves are a stop loss, the value of the Puts. That is an intrinsic cost, which means I do not expect this bull run, this uptrend to continue for a long period of time but enjoy it while it goes.  Q: You have a buy on Dr Reddys Laboratories? A: Yes. The buy list has to be larger if the short-term trend is up. Dr Reddy's is at lifetime new high, one cannot ignore it. We have talked about it earlier also that here is a stock that does not come back. It is like Sun Pharmaceutical Industries. We want to go long today in DRL because the chances are that stocks that just emerged into lifetime new highs will show significant momentum and give much bigger gains. They are in uncharted territory. EMs haven't lost sheen yet; cherry pick stocks: Nilesh Shah Q: You have picked up Hero MotoCorp from the auto space for the day? A: Yes, it is a nice chart. Last week also it was a pick. The reason is that it has made a double bottom and rallied on from that. However, the much bigger reason is when the Nifty fell to 5,500 Hero MotoCorp did not because it has already completed its bear market at Rs 1,425 much earlier. So, there was a strong rally and a mild correction. It is outperforming the Nifty now and outperforming most auto stocks. I am not going into the reasons because I do not know them but I know that the charts are suggesting that Hero MotoCorp is now willing to go much higher, a buying opportunity today after decent gains we saw on Friday.       Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed.  _PAGEBREAK_ Q: You think Reliance Communications (RComm) still got some upward momentum going for it? A: Yes, it does. After the big move RComm has been in a trading range for the last four-five days. We are anticipating a breakout on the upside and that is normal because a stock in an uptrend goes into a trading range, we always assume that the range will breakout in the direction of the trend, which is up in this case. There is no confusion. Therefore, we are anticipating and if this works out then we are buying at the lows of a beginning of a new breakout move. I think it is a dream trade. If it does not work, one gets stopped out. However, if it does then it could give lot of money on the upside.     Q: Dish TV had a rocky week gone by? A: It rallied because of Nifty rally and then fizzled out. It stopped and closed at its resistance levels. It seems unlikely that it will cross the resistance. This is an example of a chart that was bullish and has turned topsy-turvy and become completely bearish. We want to go short in it because today could be a slightly choppy day also. It is not as if it will be one way, which is why I said that buy on dips, buy on consolidation and Dish TV could easily go down in a choppy day. Q: You have a buy call on Dabur India? A: Dabur has been one of those outperformers. It went through a mild correction while the Nifty was correcting and that is normal. It seems to be coming out of a trading range or a symmetrical triangle. That should bring it back to its earlier highs and even slowly move on to lifetime new highs. All said and done, it is an attractive chart to be in. Q: You have picked up United Phosphorous on the sell side? A: The reason is that there are few selling opportunities for the day and it was more of a balance. United Phosphorous is going through a deep correction. For an investor this correction is giving a buying opportunity, but for a trader the sense is that it is going much lower. Therefore, a short trade could be taken today. It is a very short-term trade. If it doesn’t work for a couple of days then do not overstay or welcome. Q: If we do get off to opening at 5,830 levels, how would you take it through the day? A: We have to maintain a bullish bias, which means if we see some slides from the open, at some point the market should find support and that is a buying opportunity. Ideally we want to go in at a dip. I cannot give a level but approximately somewhere around 5,790-5,800 would be an opportunity to go long. All these are intraday trades. _PAGEBREAK_ Q: Assuming you see a bit of a sharper dip in trade though, would you read it as a sign that the market was beginning to falter again and start looking for shorting opportunities or do you think it is a good idea to buy albeit in smaller portions on a long position? A: I think it is a better idea to go long because the market has given a very significant rally. They could easily falter but today would be too early for that process to start. This market could go up, we do not know. However, the trade is to be on the long side till we see clear signs of distribution. That hasn’t even started. Q: How would you approach capital goods that rallied Friday, something like Bharat Heavy Electricals (BHEL)? A: Buy it because BHEL's rally was handsome on Friday, it was quite remarkable. I am discussing all short-term views. However, for this week, BHEL remains a buy; look for intraday dips, intraday consolidations and go long. Take a view that it is going higher. It should. Q: Technically how does the chart look of Infosys? A: Technically it is on the verge of breaking Rs 2,500. So, if it is showing pressure, do not buy it because if it opens lower then intraday traders have to wait for signs of stability for any stocker index, not just Infosys. However, at some point I would be a buyer in Infosys. I would not be a seller. Q: You expect more downside in Ranbaxy Laboratories? A: Unfortunately yes and that means one has to sell it; sell in strength, sell on a consolidation, in fact sell on weakness also. Not likely to stop soon. Q: How would you trade Reliance Industries from Friday’s move? A: We have only two options in the market; buy or sell. The third option is avoid. In reality I would avoid Reliance. At Rs 860 it is not a buy and certainly not a sell after those big gap ups that it has shown. However, if somebody wants to trade Reliance then it has to be on the long side mainly in theme with the Nifty because in Friday's price action Reliance was disappointing; it faced lot of resistance, it is likely to stay there. Therefore, ideally one does not want to touch it today. Q: How would you trade Punj Lloyd? A: Go short in it. The small rallies we are seeing are nothing. The consolidations could easily break on the downside. If they do not, if they go up, we do not take the trade. However, the idea is if there is a mild rally or even a stable environment then the trade is to go short in it.