Nifty to slip sub 5970; don't catch falling knife: Sukhani

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

Stay with short bias; avoid banks till expiry: Experts Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: Your views on the index and how you would approach trade after yesterday’s cut? A: We have been short almost at the top, 6,150; some profits were taken yesterday because short-term traders should take money off the table, some short positions remained. The market is giving is clear signs of distribution and I am saying this because the market fall easily; individual stocks, public sector undertaking (PSU) banks, Bank Nifty when it declines, it declines without any effort, but the rallies have been laboured. We needed four days to cover up what one day of decline has taken away. All said and done sideways movement is coming after 700 point rally. Therefore, I am considering this to be a process of distribution. That means that 5,970, which is the earlier support at where we are standing will not eventually hold probably we are looking at lower levels. Eventually the market will tell, but the view is that there is no purpose in trying to catch falling knife or even trying to buy these dips. Nifty to stay in 5500-6100; hold quality stocks: Edelweiss Q: Titan Industries is back in your sell list? A: Yes, Titan is back in the sell list, it is a favourite short sell. After a strong rally, Titan is now stalling. It is on the verge of a significant breakdown. On Thursday it fell, but somehow held its piece, but it is unlikely that will happen today. In a choppy market, which I what I would expect today some stocks will go down and the weaker ones will be battered. Therefore, Titan in spite of the fact that it bounced from lows on Thursday, could be an appropriate short sell. Q: Wipro is also in your sell list today? A: Wipro has a disappointing chart. I would have love to put it in my buy list, but the charts are suggesting something different in spite of the fact that IT index is bottoming out, Tata Consultancy Services (TCS), HCL Technologies, Infosys are doing the right things. Wipro is almost at its lows that it recorded a few weeks ago. Therefore, a stock that is at the lows suggests that even the slightest nudge pushes it to new lows and that is not good news. So, in spite of the fact that I would not sell IT or even the index, Wipro individually becomes a short sell, it is probably suggesting that it is doing something different. Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed. _PAGEBREAK_ Q: Manappuram Finance is a long trade for you? A: It is a long trade and it comes with all the risks associated with smallcap companies, which is why a stop loss is used. It has been building a base for almost two months now. It fell dramatically and then in spite of the fact that news has been coming, gold has been coming down, bad results have been reported, it is not giving way. It does appear that breaking out of a base and a target of Rs 20 is possible. This is a high risk trade. It is also high reward. Therefore, traders must understand and manage their portfolios or manage their trade properly. Q: Ambuja Cements is a buy this morning? A: Ambuja Cements is an attractive chart and after a sharp run up the stock went into a consolidation. Therefore, it is not doing what the Nifty is doing and cement stocks often have their own path like sugar has its own theme. However, cement is now consolidating. This consolidation could easily lead to a breakout irrespective of what the market does. I am not thinking of a breakout. For today, in a choppy market Ambuja could be an excellent day trade. Q: You have a buy call on Idea Cellular? A: Idea is one of the better stocks to buy. A rally from Rs 100 to Rs 135, a small correction, which is what a good stock should do and after that correction the stock has gone sideways. It is mainly because the Nifty has become choppy. Short-term trader should look to buy strength today or subsequent days till the market remain choppy and Idea is one of the strongest of the stocks. Excellent buying opportunity, wait for the context and that applies to all the buys. If the market is not giving way on the downside then the buying is worthwhile. Q: You have a sell on Petronet LNG? A: Petronet LNG was in a trading range and I thought it is going to go up. However, on Thursday it dropped down and fell to 15 day lows. It has given up all the gains that it was nothing for the last 15 days. The trading range has broken on the downside giving a clear indication that a rally that we saw was the bear market rally. That is a pity because Petronet LNG has given a lot of money to long traders earlier, but these are different times. Petronet is a short sell today and if it works out, carry it forward. It is looking at lower levels.  Q: How would you approach the index if we get a bounce above 6,000 for the Nifty? A: We could get a bounce above 6,000. There is nothing wrong in that. We had a big decline and Thursday's decline came on the back of three consecutive days of declines. Therefore, market will go up, but the key is, are we bullish and the answer is, not yet. Certainly, there are no signs to be bullish. The trade is to wait patiently, identify a rally and then sell into that rally. I would not buy because buying could be very choppy.  _PAGEBREAK_ Q: What is State Bank of India's chat looking like after the fall? A: After the big decline one want to step aside and do nothing. However, I would not go short in SBI today after the stupendous fall. If the trade is to identify a dip or a consolidation as a day trader then go long in it. Q: How is Jaiprakash Associates looking after the fall? A: It is a sell. It is a back to back decline. One cannot buy it. Identify a location, some small rally and sell short. It is looking much lower.  Q: How would you trade Reliance Communications? A: I would buy it. There is a big rally. It has to stop, pause and consolidate. It is a buying opportunity. Any dip or even at current levels keep a stop if the market is getting cheerful. Reliance Communications is a substitute for the index on the long side. Q: Your views on SKS Microfinance? A: One has to sell it, but I do not think if it is in the Futures and Options’ segment. Therefore, in effect one cannot sell. One can just take a day trade here. I would not buy it; the back to back declines do not justify any kind of knife catching, just avoid it. Q: How is the chart of Dish TV looking now after yesterday’s 5 percent crack? A: Dish TV was a sell yesterday and it continues to be the same today as well. It is breaking all kind of support levels; it was in a trading range, a decisive breakdown has occurred so it is a short sell. I think it is going much lower. Q: What do you do with the Bank Nifty now? Is it has corrected a lot. Would you wind up your shorts here or is there a lot of way to go on the way down? A: I think there is a lot of way to go down. The Bank Nifty shorts are now positional shorts. I am not winding them up, just let them be. Q: Where would you say supports lie for Ranbaxy Laboratories? A: There is no support. It has fallen and cracked, it is going to make new lows. It is a horrible chart all of a sudden and one knows the reason. There is no support, do not buy it.