Won't advise trading today; hold short positions: Sukhani

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

Sub-5500 mkt stage for bears; EMs out of FII favours: IL&FS Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: Expiry day but we have got some strength globally. How would you trade a start in the green for the market today? A: Today is an expiry day and the market is opening on the exact opposite of where it closed. For intraday and short-term traders, today is probably a no trade zone. This rally that we are seeing in the SGX Nifty is because of expiry considerations rather than anything else. We want to see if there is follow-through and that follow-through will come tomorrow or on Monday on the upside. Therefore, today is not a good day. What to do with intermediate term short positions; hold them, the stop loss for that is 5,800. It is wide but it is important to give enough space so that a relief rally, which can easily fizzle out is accepted within the stop loss. It is not a very good environment to trade in today and only individual stocks should be favoured. Q: Tata Motors has been on a weakish kind of trend, you think it could head lower? A: I think it is. A bearish head and shoulder is confirmed and broken down in Tata Motors. Today one could see an upsurge and maybe if there is some follow-through then tomorrow morning. That strength should be used to build short positions in it. These short positions should be done with July series Options, not today and I am assuming that the eventual target for this is Rs 240-245, much lower. That is the pattern target. So, it is a day trade for today but a lot of other dynamics also come into play today. However, it is certainly a swing trade through next week.  Wise to stay out of mkt now; shun IT, telecom: NBIE Q: The other stock which has been disturbingly weak is Ambuja Cements; do you think that is breaking down? A: Ambuja Cements is breaking down. The rally we saw in Ambuja was unfortunately a bear market rally, bear flag that suggests that significantly lower prices are coming. Most cement stocks are giving the same impression. Therefore, Ambuja is a short sell. I do not know what will happen today but any strength in Ambuja today should be used to develop a short position for tomorrow, for Monday.   Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed. _PAGEBREAK_ Q: You are still going with ITC for strength? A: ITC has strong support at the Rs 315-320 area. It stopped there. Yesterday I had suggested that ITC is one of the very few largecap charts which are not showing signs of distribution for two reasons; (1) it is not showing signs of distribution that means there is strength there (2) it is coming at a support and if the Nifty is going up, if the SGX is going up, if there is a rally in the offing then ITC will be one of the major participants in it. Therefore, nice charts on the long side, take a position today and then try to carry it till the rally lasts. Q: Another long trade is Zee Entertainment? A: Zee has been a favourite. In the Rs 220-225 area it is finding support. This support is anybody's guess but it is an outperformer. Therefore, on period of days when the market could swing upwards for a relief rally, we want to go with strength and Zee is one of the stronger stocks. Yesterday also it stopped at support and did well and that momentum should continue. Take a position in Zee. All the trades we are discussing are not for today because a lot of volatility could come in but they should be carried in.  Q: You have chosen Wipro from IT pack? A: Wipro is an excellent chart. It has gone into a very narrow consolidation for one-and-a-half month. It is on the verge of breaking on the upside. Therefore, among the IT stocks, Wipro has the best options for seeing some kind of a rally. The others like Tata Consultancy Services (TCS) are now giving signs that they are going to pause for sometime. So, Wipro has a good chart, we want to buy it today and we can ignore the market dynamics for what happens for Futures and Options (F&O). Wipro can be bought into. Q: You maintain your sell on JSW Steel? A: Horrible chart because large trading range and two days ago it broke down at Rs 650 levels suggesting that maybe Rs 550 is the eventual target. This is not unusual, most of the Jindal or metal stocks are giving similar patterns. JSW Steel is now in an imminent danger of giving a sharp decline in the next few days, take a short position here and use the rally today to your advantage to take positions on the short side in the stocks we have discussed by selling into strength.  Q: It looks like we have got a bit of gap up start. How would you trade it on the index today? A: It is also a relief rally. The gap up is now untradeable because if one is going to play for a bounce the bounce has come in the form of an opening gap and together with that there is F&O expiry. It is not a good idea to trade either the Bank Nifty or the Nifty today. It is disappointing sometimes. We want to see if this gap and whatever happens today is sustainable or is just a one-off wonder. We will find that out tomorrow or on Monday then only we should be having new strategies for the Nifty. As of now we expected a relief rally and that rally is coming in the form of a gap. It is not tradable. PAGEBREAK_ Q: If the rally persists tomorrow, are there any shorting opportunities or you would want to give this pullback a bit of elbowroom and not bounce on it immediately? A: We will give it elbowroom because we cannot time the end of the rally; we cannot say it will end tomorrow afternoon. Actually it should but even then. So, the day when this market suggests that upside resistance is coming then that is the time when we should be looking to sell in strength and as usual chart patterns keep on changing, but this is what I would perceive now. Q: Which of these heavyweights is vulnerable according to you, Bharti Airtel or Tata Motors? A: Tata Motors. Bharti is at least giving a strong sense of support and that may or may not hold. However, Tata Motors has already given a clear bearish signal. It is moving towards Rs 240-245. That is a clear target on Tata Motors, which is not available on Bharti, at least not yet. Q: Would you start taking profits on your long dollar trades as well or short rupee trade? A: We follow momentum but I think if the market stalls today as it is doing, we will probably stopped out anyway because stops have been tightened, they are now above 60/USD. In the Futures market there is a mild premium, but it is quite possible that we maybe pushed out of the market. We would like that happen to us because I would assume that the dollar is in overbought territory, it can stay there but it makes sense to get out.