Mkt headed lower; time to sell in May and go away: Sukhani

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

Also Read: Bernanke spoils mkts' mood; Nifty to slip below 6000 today? Below is the verbatim transcript of Sukhani's interview with CNBC-TV18. Q: Indications that we will start off in the red today, how do you approach that on the index? A: We have been mildly bearish on the market from Monday evening. Monday was a day when one day reversal took place; it went above 6,200, closed much below it and since then the view has been that the market is probably making an intermediate top, going through distribution. Therefore, the bias continues to remain mildly bearish. Intraday trades are taken on the bearish side and some positions are being carried forward; short positions because this could simply be a correction. We are moderating our volumes and that is how we control whether we are in a trend or whether we are in a correction. As of now I am assuming that this is correcting 700 point upmove. That may not be so, but that is something we will find out later. May is not a good month to buy anyway. We have ‘sell in May’ philosophy and that is likely to work out this time. Therefore, the view is that the market is moving lower and 6,000 is a strong support and we can put that as a zone, 6,020-6,030. If that gives way then we are looking at lower levels and at each level there will be support but the trade is still on the short side.    See Nifty in 6000-6300 range for May series: Nomura Q: You have a sell call on Union Bank of India today? A: We have been selling banks because banks have given horrible charts; they are all distributing at the top and promising lower levels. Union Bank is making a large head and shoulder pattern and breaking down and that gives much lower target than the day trading target that I have set. Therefore, this breakdown in Union Bank is not only a day trade; it is also a position trade. Q: You have GAIL India in your sell list? A: GAIL is a disappointment. It rallied sharply, a V-shaped rally then it started falling. That decline could be a correction. Now it seems that it has made a small trading range and is likely to breakdown today. This is in anticipation of a breakdown, but a short position can be taken because the market is looking at lower levels. Disclosure: Sudarshan Sukhani has no holdings in the stocks discussed. _PAGEBREAK_ Q: You are buying Idea Cellular today? A: Yes, it is one of the better stocks. Idea did nothing for the last six days and that is good news for me because I like good stocks that stops making news. That suggests that they are now in the process of beginning a big expansionary move. It is not easy to say if Idea will go up or can have that momentum if the Nifty is in a bit of a struggle but it is still a trade on the long side. I would like to buy it. If not anything, it will be a breakeven, it will be a scratch and even in a choppy market some stocks go up and Idea is the most likely one for a big upmove.  Q: Future Retail is also a short call in your list this morning? A: It is a very big disappointment. It was a short three days ago also and that worked out and on Wednesday a big decline on the verge of strong support level being broken down. I have been upbeat on this stock but me being upbeat means nothing, we still have to follow charts and the chart suggests that lower levels are coming, not just a day trade but one can carry these positions on. Q: You have a buy call on Jain Irrigation Systems? A: Jain Irrigation has nice chart, almost similar to Idea. It completely its bear market and after that it consolidated, which is the way a good stock should begin its upmove and that consolidation led to the first up thrust and again a consolidation. I would assume that this consolidation will eventually lead to a renewed upmove. I would be a buyer here. Traders can see the context. If the market opens weak and if the stock opens weak then wait patiently for some kind of stability to come but take trade on the long side. Q: You have a bullish stance of United Phosphorous? A: United Phosphorous had a big rally from Rs 108 to Rs 150, almost 50 percent and then it consolidated. Now it is breaking out of that consolidation. A big rally, small consolidation, breakout on the upside suggests there is strong upside momentum. So, it is not my task to question why this is so. The chart is excellent for a momentum trader. This is not an investing idea, but short-term traders must track it today. Q: 6,050 for the Nifty, what kind of trade would you initiate if you had to? A: We are already seeing a gap down so who have short positions in the market should maintain the positions. The stop loss shifts now to 6,150. That is 100 points away, but that is the way this trade should be structured. Those who want to take fresh positions, wait for small intraday rallies, still take short positions. If the market maintains this momentum today then that would be the first sign that perhaps a deeper correction is coming. That is a big 'if', which means if we close 50 points lower that will not be good news for the bulls. Therefore, we will position ourselves on the short side still. _PAGEBREAK_ Q: What have you made of the recent pullback in Crompton Greaves? A: Crompton Greaves is a buying opportunity. It is a breakout after a big bear markets, basing patterns, but one cannot buy now. It has already run-up a lot. All stocks go through a correction or a consolidation. Once it consolidates then it is worth looking into. Q: Would you say Manappuram Finance has bottomed out or not quite clear? A: Manappuram seems to have gone through a very bad patch; it has been building a base for the last two months in Rs 14-17 range. It is broken out. There is an immediate target of Rs 19.5-20. It also influences a lot by news. Therefore, traders who take this position must understand that, keep a stop loss.  Q: Would you buy the dip on Adani Power or is the run done? A: The run is not done. The charts are very attractive. I would not buy it today for a reason that we have no way of quantifying how much the dip will be. Let the dip be over and the easiest way to identify that the dip is over is when we have higher close. If the market closes higher, if the stock price is better than yesterday then that is a sign that we should buy Adani Power. However, it is a buying opportunity. Q: How would you trade Larsen and Toubro (L&T)? A: Larsen & Toubro's chart is bad. On Wednesday it confirmed a fairly bearish pattern that gives a downside target of around Rs 1,400. That is not today's target. However, L&T is a sell. It is something one can put a stop on and sell whenever a small rally is seen or even without a small rally.     Q: Technically how does Dish TV looks? A: Dish TV's bad price action on Wednesday suggests that there is strong resistance and if not anything it is coming towards Rs 65. The results could be anything, but I would trade it only on the short side. Q: How would you trade Zee Entertainment? A: Zee has seen an excellent run up. Now all stocks get tired. This one is also showing the same signs of distribution that the Nifty is doing. I would expect lower levels here.