Nifty will attempt 5,100; short-term trend is up: Sukhani

It was a flat day across global markets with the US markets closed. Sudarshan Sukhani of s2analytics.com says there is now a little room for our market to pullback.

We had a very decent chart pattern which was decent for the bulls. The 4,950 level was taken out decisively yesterday and there are pattern targets towards 5,100. He sees no reason why we won’t approach or at least make an attempt to approach 5,100. “The short-term trend is up. The market could be bit choppy today but I do not see any reason to go and short sell. The idea would be to buy dips.” Below is the edited transcript of Sukhani’s interview with CNBC-TV18. Also watch the accompanying video. Q: It was a flat day globally but do you think the market could pullback a bit more? A: I think so. We had a very decent chart pattern that was decent for the bulls. The 4,950 level has been taken out decisively yesterday and there are pattern targets towards 5,100 so there seems to be no reason why we won’t approach or at least make an attempt to approach 5,100. So the short-term trend is up. The market could be bit choppy today, but I do not see any reason to go and short sell. The idea would be to buy dips. Q: You have chosen to pick ICICI Bank today? A: I had referred it yesterday also, and it’s probably bottoming out. If that is so, the Bank Nifty is outperforming and ICICI is now going to join the out performance inside the banking sector itself. If somebody who wants to take a positional trade then it’s an excellent idea. I expect this stock to do much better today than the broad market which could remain choppy. Q: You have a sell on Sun Pharmaceutical Industries? A: Yes because Sun Pharma showed signs of distribution but I may be wrong. It’s one of my favourite stocks on the long side but charts are charts. I expect the stock to show some more declines. The declines are likely to be tradable, so it’s a short sell. It’s not a bear market. It’s just that we are trying to get advantage of what seems to be an ongoing correction. Q: Technically Coal India looks like a buy? A: The stock stopped at Rs 300 levels and it did that much earlier also. So Rs 300 is now becoming some kind of a base or a band. It’s a buy because I think the results are not going to push it below Rs 300. If that is the case then the only other way for the stock would be to inch dramatically upwards. On the downside Rs 300 seems to be the worst case scenario, so there is a buying opportunity. If this works out then Coal India’s target could easily be Rs 360 again. Q: Aditya Birla Nuvo has come into your buy list? A: It was one of the favourites but it never did what it should have done. It went to Rs 1,050 but that was nothing. The market is also in a relatively bad shape and if the Nifty is bottoming out then AB Nuvo is joining that bottoming out process and I would be upbeat. Today, it seems that yesterday’s small gains are likely to be built upon and some of the semi financials are going to do much better. Q: Max India is in your sell list? A: It’s an unsure sell. After the rally, on the back of the sale news, it went into a correction. That correction should have been over but it is not doing that. It is drifting listlessly and day by day it’s making mildly bearish patterns. So the trade here is to take advantage of what could be a deeper correction than we thought. It’s not a downtrend but for short-term traders, for day traders Max India is a short sell because it could slide more, breakdown, reach Rs 180. There is some money on the downside if that happens. Q: You have a sell on Alstom Projects? A: Alstom Projects has been a disappointment. It bottomed out but the charts are not suggesting that. So in a choppy environment, Alstom has a trading range in which the lower band is Rs 340. It touched Rs 360-365, which was the upper limit. It seems that it is now going touch Rs 340 again. So for short-term traders there is a 15-20 point possibility of taking advantage of a decline. This is not a positional trade but for short-term traders that much of points are good enough. _PAGEBREAK_ Q: Around this 5000 mark, what should a Nifty trader do? A: We have reached 5000 which should be the first hurdle to any gains. So for Nifty traders, the trade is still to be long but for intraday traders you have to wait patiently for a minor dip during the day or for some consolidation before you take a trade on the long side. I wouldn’t go long just at the open. Position traders should maintain their positions and continue. Q: At what point would you consider winding up any of your longs or rethinking this long strategy that you have on at this point in time? What kind of levels would be important? A: I am prepared to give some leeway to this move, that means somewhere around 4920, I would say that this trade is no longer working out and in fact that is the break even. So it’s not a very big sacrifice to wait for that level. I don’t think that will come so soon. On the upside if we are approaching 5100 that would almost certainly be a trigger to eventually close all long positions. But in between, I think we have to give the markets some space to move up. Q: One of the big movers from yesterday was Titan Industries; technically what would you give that stock? A: Titan is now creating some confusion in my mind. It first gave the impression of a breakdown and now yesterday it suggested that it might just have been a mild correction. So we will have to give it the benefit of doubt. The stock has been in an uptrend, and I would be a buyer in Titan. Q: There has been strength on some of these quasi textile realty names like Bombay Dyeing, S Kumars, on Bombay Dyeing specifically any targets? A: Bombay dyeing seems to have completed its downtrend and yesterday’s big move tells us that the momentum is now building on the upside. Immediate target of Rs 515 is visible but if that is crossed then eventually the earlier highs of Rs 565 should be revisited. So we have to trade Bombay Dyeing on the long side and it is worth taking that trade. Q: How much more downside do you see in Educomp or do you think its getting exhausted? A: No it is not getting exhausted because it keeps on making new lows, even I am a little surprised. I thought maybe Rs 140-130 but now it is not going to stop, I assume it would go to double digits in spite of the fact that the Nifty is going up. Q: Shree Renuka Sugars is struggling to get above that Rs 30 mark? A: Yes it is struggling to get above the Rs 30 mark but not succeeding and it’s making these new lows. Today it is coming out with numbers and I don’t know how that will impact but Shree Renuka is unlikely to suddenly turnaround and rally. In fact it is a sell and a downside target of Rs 25 seems very reasonable for it. Q: Your view on Axis Bank? A: Axis Bank is a much better stock, the banks are doing well. Just like ICICI Bank, Axis Bank is suggesting that at least a short-term bottom is coming in place and that could well be the lows if we begin a new uptrend. So Axis Bank is a buying opportunity. At Rs 1000 it is worth buying, an immediate target is Rs 1060 but that could easily be exceeded. Q: Would you start taking profits on some of the oil marketing companies. Is that run done? A: Yes, it’s done. In fact HPCL was in my sell list yesterday. That is done and over with. We do not want it. They have to now correct, consolidate and it is a long process. So if somebody hasn’t then they should take profit and exit and step aside. _PAGEBREAK_ Q: Your views on Aurobindo Pharma? A: It’s a buying opportunity because broadly pharma is doing well. Dishman Pharma is having a better chart but even Aurobindo Pharma is suggesting that some kind of a double bottom is coming in place although it is not confirmed yet. It’s worth going long in it. Q: What about Jain Irrigation which did not have a bad session yesterday? A: I wouldn’t buy it because it has the sporadic sessions, which are not bad but then it has series of down days. So one day or even few days are not enough for Jain Irrigation. If at all, I have to take a trade, then I would say that it’s moving down and towards a target of Rs 69 or even Rs 65 and I would ignore the upmove. Q: You were trading long the dollar. Did you change that strategy around over the last couple of days or do you think the rupee is going to fall again? A: That strategy was changed last week. I explained that I was not short the dollar. That also was closed at 55.20, which was just  one rupee down move. At this point, I do not have a view but I would be afraid of going long again in the dollar so soon. I think the rupee could chop around for some time. Q: Many of the infrastructure companies are reporting numbers today, anything from that space like GMR Infrastructure, Lanco Infratech that looks promising on the charts?
A: GMR Infrastructure and Lanco Infratech both look promising on the charts. I do get a sense that they are probably completing whatever correction test of the previous lows they were doing. I assume the best way would be to let them report their numbers and let the market reaction come in, but the next trade here should be to go long in them. Q: Technically which one would you pitch for from the FMCG?
A: I have been pitching for Asian Paints for a long time now and that continues and Bata India. I am not so keen on Jubilant Foodworks but the markets are very keen on it. My priority would still be Bata, Asian Paints and Jubilant. Q: How are you approaching the Bank Nifty?
A: We are long in the Bank Nifty. I think there is more upside because I am upbeat on the Nifty. But at least in this leg, the Bank Nifty is likely to outperform. Maybe later towards the June meeting, it will under perform but not now. Q: What are the weak looking index stocks now which you would strictly avoid?
A: Reliance Industries is weak, so I would completely avoid Reliance. Lot of the other metal stock like Hindalco, Tata Steel, Sterlite Industries are not worth buying because while they could move, the chances are that they will be significant under performers. So the focus is on IT, on banking and on the capital goods sector which is Larsen and Toubro and BHEL. Disclosure: I have no personal holding in any of the stocks discussed.