5950 remains key resistance for Nifty; buy on dips: Sukhani

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

Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: How would you approach expiry day. Would you rollover long on the Nifty or would you cut positions today? A: We have been long since 5,500 and the idea was that half the position should be continued, take profits in half, reenter during intraday periods of consolidation, dips. That is the theme and that theme needs to continue. Rollover positions from the half position that one maintains on a continuous basis, roll them over. The market has not shown any signs of momentum coming to an end or rather starting to decline. We will wait. I suspect we are very close to a top, 5,950 is the zone where significant resistance comes, but that is only a number, the market needs to prove that it is not willing to go further. That proof of course is far from available. Rollover these positions, keep half of it only for intraday trading, buy during the running corrections that we are seeing at the first sign of distress and that may take its time coming. Close positions because then the market will become choppy. Q: ICICI Bank has had a great run. Do you think it is good for more? A: Yes. It has been a vertical rally in ICICI Bank - that’s almost similar to what the Bank Nifty has done. I would expect it to at least breakout. The problem is, this morning; a lot of these stocks are expected to open with gap ups. The trade then should be to wait patiently for intraday consolidation. Then still go long because ICICI is giving a sense of another breakout after that V-shaped rally. It’s a good trade to be in on the long side. 6000 major cap for Nifty; gold to see sub-$1300: Darashaw Q: You have a buy on Brigade Enterprises. A: It is one of the better charts in the real estate. It is small and there are associated risks in trading smallcap stocks. The stock has made a decent head and shoulder pattern; it has broken out of that. On Tuesday a small dip or rather intraday or a pause in the uptrend was seen. That justifies going long because one is buying it that much better. Therefore, a good bullish pattern sees higher targets here. Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed. _PAGEBREAK_ Q: You are selling Jindal Steel and Power (JSPL)? A: JSPL is not a confidence building chart, any rally in JSPL are quickly sold into. There was a mild upmove, hardly worth looking at and that collapsed on Tuesday on the back of news, but news is just one part of it, the charts are very distressing, there are lower levels coming. So, even in an ongoing uptrend it is worth shorting it especially if it rallies a bit higher today. Q: Hindustan Zinc also qualifies as a sell in your book today? A: Hindustan Zinc should have done better things. I thought it was, but the market has its own wisdom. It has collapsed, it has broken down from a support level and is now moving lower, which is rather surprising, but it is almost at news low for downtrend for the metals. Therefore, we want to sell it and in any case if someone has one or two long positions then these also act as hedges. Independently they are short selling ideas and also as part of collective portfolio. Q: You have started getting more bullish on underperforming name like Sintex Industries? A: Yes, I have to explain that these are all short-term ideas. So, it is not as if I am upbeat on the broad thrust of stocks that they are going higher. At some point they are going to stop. However, Sintex is now making a double bottom, almost confirming that pattern; it had a weak day on Tuesday. That is a good day to do buy it now. Therefore, Sintex is a buying opportunity. It is a short-term trade. So, traders should not overstay their welcome, but with a gap up today in the Nifty the focus should shift on smallcaps and midcaps because I do not know how much opportunities one will get in a larger Nifty heavyweights.  Q: You are buying Hanung Toys and Textiles as well? A: Yes, it is same theory, same theme. Focus on smallcaps because the Nifty is doing its own thing. If one is long in the Nifty, make money today. Hanung Toys has made another of the similar patterns, head and shoulder, broken out of it. So, there is a significant upside here. It is important to understand that one need to trade this with stop losses and also wait patiently, convert this into a swing trade, start today. If it is making money then go ahead and carry it over. Q: How would you approach intraday trading call on the index today? A: The pre-opening has been very surprising. On Wednesday the SGX was open and it was trading above 5,900 and this morning also. So, we are seeing a wide gap between the Nifty at pre-open and the SGX. If the Nifty opens just 20 points higher then the trade is to stay away. One want to see a significant dip before buying this market. The market is then giving first sign of weakness. If there is a big gap up then the Nifty becomes avoid. Focus only on midcaps and smallcaps, we do not even touch it. Only if it is 20 points, as they suggest then we want to be a buyer on an intraday dip. It is unusual. _PAGEBREAK_ Q: Do you think there is more momentum in Jaiprakash Associates or would you take profits and checkout here? A: I think there is more momentum. The market is not giving signs that it is waning. JP Associates has broken earlier resistance levels, breaking out the next one. The idea should be to position in such way that one buys a minor dip or a consolidation. However, the trade is to go long.  Q: Would you buy the dip in Reliance Communications or is the run done on the stock? A: I would buy the dip. We want to find our how deep the dip is. So, there is no need to buy in the morning or even today, but the trade is to buy it. I do not think Reliance Communications is cooling off. The strong momentum that we have seen, this sudden surge suggests something is changing here. Any significant dip should be bought into. Q: How would you trade Arvind? A: It is very disappointing chart. It is facing significant resistance in Rs 83-84 area and on Tuesday it came down sharply that suggests that not only is the resistance holding, may be it is willing to break its support levels at Rs 70-75. It is a bad chart to be in and we want to be short here. Q: Your views on Indiabulls Real Estate? A: It is a nice chart. Like Brigade Enterprises, Indiabulls Real Estate has also done the right things, bottoming out, build a base; it is now coming out of that base. There was a big run up on Tuesday. One usually does not buy after a run up of that kind, one want the market to pause, but any pause here should be a buying opportunity. All the trades we are talking about are short-term trades. Q: What about Hero MotoCorp from autos, which has had a bounce back? A: That is a much better chart. It stopped falling and then stalled in a narrow range for almost ten days. It has broken out of that range. I think there is more upside here. Hero MotoCorp is beginning an upmove, irrespective of fundamentals this is one stock one should be looking at to buy. Q: How would you trade HDFC Bank? A: I would be a buyer here. If the Nifty is to go up, HDFC Bank will contribute again. Tuesday’s small dip because of indifferent results should be ignored. This is a buying opportunity, but not immediately today. Let it correct a bit more or consolidate and go long in it. Q: How have you been characterising 300 point Nifty rally? Is that one more of those powerful pullback rallies or does it have technically the texture of something more significant? A: I am treating it as a pullback rally. The market fell a lot, 650 points. They are going to rally, it is not surprising. Everything was conducive; gold, partly crude, world markets, things fell altogether. So, the rally was a little more explosive rather than ceded. There is nothing on the technical picture that suggests that the downtrend is over. These sharp pullbacks are inevitable.