Nifty may see 6000 in December: Sudarshan Sukhani

The Indian market witnessed a spectacular rally on Tuesday. In an interview to CNBC-TV18, Sudarshan Sukhani, s2analytics.com says the target of 6,000 or thereabouts seems within the realm of possibility in December now. "Now, we are looking at a short-term uptrend with a strong momentum," he adds.

Also read: Things will be 'different' in 2013, says Morgan Stanley Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee. Q: What are your near-term targets for the index now? A: Tuesday’s gap up immediately gave us a message that the 5,630-5,650 resistance has been taken out. It was the first hump that was easily cleared. Now, we are looking at a short-term uptrend with a strong momentum. Ideally, we want follow through on the next day. The next day is today. It does appear there will be some follow through on the upside. If that follow through comes, two things will happen. First, Tuesday’s rally has been given more impetus, but the other resistance area of 5,730 has also been taken out. I suspect both of these events will come about today inspite of the volatility that F&O expiry brings. We were taking long positions earlier on Tuesday. These long positions should be taken today. They should also be carried. That means we become positional traders on the long side today morning. The target of 6,000 or thereabouts seems within the realm of possibility in December now. So, clearly the mood has changed. Q: Real estate picked up as well on Tuesday. Would you back something like an HDIL? A: HDIL has been a favourite earlier also. Lot of these stocks are giving continuation patterns in an up trend which means HDIL rallied, it went into a sideways range and a sideways trade could go anyway. Now, there are clear signs that the pattern that it is developing gives us another rally in the offering. So, HDIL is something we want to back today. For today, for all the stocks, there is this risk of F&O settlement. The market has its own dynamics of how the settlement does by afternoon. So, all these trades should be carried for the next day which means take it in December series and don’t get or surprised by absurd volatility in the afternoon. Q: What is the reason for buying Titan this morning? A: Titan rallied from Rs 210 to its now Rs 295. It is almost 45 percent in three months and we caught it when it moved up above Rs 230. Trends will always be discovered once they start, never at the beginning. Since then Titan has been moving up. It has come in the buy list again and again as it has come today. It is making new highs for this uptrend. Hence, it is a buying opportunity. Q: Why have you picked Kotak Mahindra Bank today? A: Same pattern as HDIL, in fact much better. A strong rally, a trading range and the trading range will always sometimes give the impression that it is breaking down. Kotak is now on the verge of a significant breakout on the upside. Both the companies - Mahindra & Mahindra (M&M) and Kotak of that broad group are giving excellent signs of strong uptrend’s resuming themselves. So, Kotak is a buy. Again, it is not an intraday buy necessarily. There is no need because there is more money if you carry it forward. Take the trade, use options or use December futures and continue with it. _PAGEBREAK_ Q: Jubilant Foodworks is on your sell list today? A: Yes and it is a surprise because FMCG is doing well and consumer durables are also coming back into play like Hindustan Unilever, ITC. Jubilant is distributing and it can rally because Jubilant is a very volatile stock. In an uptrending market it is not necessary to short anything but if I were to short sell, then Jubilant would be a very appropriate choice. So, during the day if there is a sense that the market is stalling, Jubilant Foodworks is a short selling idea and then if it closes weak it needs to be carried also. Q: NMDC is in your sell list as well today? A: NMDC is collapsing, it breaks a support level, goes down 20 points which is about 10-15 percent, creates a small support and then breaks it. It has just broken a support on Tuesday. On a day when the Nifty went up 90 points, NMDC went down and that is not good news. It also breaks technical levels. So, here is a short sell anyway. Even in an uptrending market, I suspect it is good trade to hedge and to take independently. Q: Your view on Bajaj Auto? A: Bajaj Auto is a green chart. It rallied, made a small flag like formation. A fag that comes midway in an uptrend and then it is resuming its rally. It resumed it on Tuesday. I think a significant upside is left. A similar pattern had developed in Bajaj Finance, which came in our buy list about few days ago. It is absolutely the same pattern; that is a rally, flag and then a new rally. There is no need to question why Bajaj Auto is going up, it is just going up. Q: Expiry days are always tricky, what is the best way to approach the index itself? A: I think the index needs to be bought into but we would wait for small intraday dips and go long. The short-term trend is up, so there is no sense in trying to give a contra trade and say it won’t go higher because it could. There is only one way to trade the index today, and that is use the volatility on the downside to go long. Q: You were talking about textiles earlier. What about stock like Raymond? A: Raymond is a favourite. It has repeatedly come in my buy list. It is now breaking out of a very handsome continuation pattern and is suggesting much higher levels. A lot of the trades that we are now discussing could be used as position trades and not just for intraday trades. Today, Raymond’s could do anything because Futures and Options expiry does unusual things. For somebody wanting to take a position should consider Raymond’s as a buy. Q: How about SKS Microfinance which has been on a tear as for the last few weeks? A: It was given as a buy when it was at Rs 110. It is now Rs 150 and it is on a tear. It was on the circuit the day before. It is a buying opportunity but you wouldn’t want to buy stocks after it they hit a circuit. You would want to wait patiently for the stocks to come down and they inevitably do. When people forget about them, then go long in them. I think SKS is embarking on a new upmove of its own. _PAGEBREAK_ Q: What about something like a Bombay Dyeing, you track that chart? A: I would be a buyer in Bombay Dyeing. It is one of the three- four textile real estate stocks like Century, Raymond etc. Bombay Dyeing, at this point is the most subdued but that doesn’t mean much because the stock is still a buying opportunity. I think Bombay Dyeing will do its own thing in its own time. It is a position trade and not a day trade. Q: What do you see on the medium-term charts for Bharti Airtel? Is there lot of headway from this Rs 300 mark that it has managed to pierce? A: No not really. We were bullish when Bharti was at Rs 270, it was inching a rupee at a time. Bharti has reached the strong resistance levels of Rs 320-330 and I do not see it on a tear from now on. It is going to do something very normal; it will go up, correct and become choppy. So, at this point Bharti is not a buy. Q: What is the chart of Jaiprakash Associates telling you? A: It is giving us a target of Rs 100 plus. It is an excellent stock to buy. It is also doing something very different from the other cement stocks. It is an outperformer and is likely to remain so. Q: So far it is has been a useless series for technology but is anything picking up on charts like Infosys? A: Technology has gone through a very sharp pullback or retracement of its own. Taking CNX-IT as the benchmark, it is giving signs of bottoming out, bullish patterns and breaking on the upside. That is exactly the pattern that Infosys is doing. Infosys is going to be a buying opportunity not just for today, but for the entire December series. Traders must remember that two down days and all this optimism will fade away. So, traders must understand that there is certain amount of exuberance which may not workout.