Mkt to be mildly volatile today: Sukhani

The week gone by was a very tricky and rough week for the Nifty. The results season kicked off with IT major Infosys' Q4 earnings, but it was disappointing.

The Reserve Bank of India (RBI) monetary policy is lined-up for tomorrow and inflation data for March will be announced today. "It would be wise to not trade on a day when newsflow is heavy, said Sudarshan Sukhani of S2analytics.com. "Today will be a mildly volatile, but tomorrow will be very volatile,” he added. According to Sukhani, if one wants to take positions only then one should take short positions options and wait patiently. Meanwhile he has a buy on Kotak Mahindra Bank, Asian Paints, Dena Bank, JSW and Arvind. He recommends selling Hindalco, Cairn India, Hindustan Zinc, CESC, Reliance Capital, Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video. Q: The week gone by was a rough week for the market, how do you approach a tricky week on the Nifty? A: Yes, it was a rough week and one of the lessons that I had learned much earlier is that I don’t trade on those news days and not trading on Infosys day, on Friday, was a very wise decision and that now continues. Today, we have a mild news event and tomorrow the big one. So ideally you don’t want to get inside this volatility because the chances are tomorrow will be very volatile and today, could be mildly so. But the view is this that we are going down. Trading is difficult but anyone willing to take positions should simply take short positions in options and wait patiently. Q: You are still staying long with the banks and today it’s Kotak Mahindra Bank? A: Yes, and that is only because Kotak Mahindra Bank has been an out performer in the recent weeks. So if there is an opportunity to go long today, for an intraday trader and this could come because today could again be a surprise on the upside just for a short while. So Kotak Mahindra is one of the best banks to stay with. Q: Lot of commodity stocks on your sell list today and one of them is Hindalco? A: The commodity stocks rallied when the Nifty had that mild rally and all of them stopped much lower than the previous highs. They are now suggesting that today could be the day when they start breaking their support levels or start making new lows for this downtrend. It is very disturbing because its not just one that could isolated but a lot of them are showing the same pattern. Hindalco had a rally that barely took it to Rs 130-131 after that we have seen declines for two days. That decline is likely to continue today even at the slightest signs of weakness. My sense is that Hindalco will eventually touch Rs 100 and I have said that before. I own shares in Hindalco. Q: Is today's sell call on Cairn India based on where you see crude going or are the charts weakening? A: That is becasue I see charts weakening. I don’t see crude going down so this is probably a contradiction but Cairn Indis's chart weakened about two-three weeks ago, since then it had a very sharp rally on the news of crude find but that rally is now again failing. The chances are that eventually before this decline hence Cairn will be below Rs 300. Q: What about Hindustan Zinc? A: Same story, it’s not just about Hindalco, it’s about lot of metal stocks. But we are looking at the best stocks to go short in, so Hindalco seems to be an ideal candidate and so is Hindustan Zinc. This stock was a darling of yesteryears, there was no way you could go and sell it, you had to buy it at every dip. Now the reverse seems to be happening, Hindustan Zinc is suggesting that its now on the verge of breaking down from a significant support level and lower levels are coming. Q: A sell on CESC from the power space as well today? A: Yes CESC was a sell earlier also, so this is a continuation. There is very large bearish head and shoulder pattern that suggests maybe Rs 220 also on CESC but that doesn’t come in a day but this is probably a positional short. _PAGEBREAK_ Q: A buy from a relatively defensive stock that is Asian Paints? A: Yes for both reasons that is it defensive and it is doing very well. It made those new highs, went through a four day correction and has begun a rally. So if the markets were to behave even mildly positive, Asian Paints should see lifetime new highs, probably today or maybe in the next few days. This is a stock you want to go and buy whenever you can. Q: What about Dena Bank which had a good run but cooled off a bit on Friday? A: That cool off is to be taken as a one day event. Dena Bank is an excellent buying opportunity. A lot of volatility is expected today, tomorrow but allowing for that volatility I would be a buyer in Dena Bank. In fact, Friday’s decline could be treated as a dip, so on any sign of strength its one of the better banks. Q: How do you trade something like Indraprastha Gas (IGL) now? A: Ideally you don’t trade it because you want it to start building a base; now that base could be at Rs 220, it could also be at Rs 180. So the trend for IGL as we all understand is down that is all I can say for it. I don’t think I want to short it at Rs 225 because we don’t know; it could stay in a 50-40 point range for months while it decides this is the lowest it will go. Q: What about Reliance Capital? A: That’s a sell, there is no confusion on that.What we saw was a bear market rally because Reliance Capital has been falling for the last four years from Rs 3,000 to Rs 200. So this bear market rally is done and over with. Now it’s a steady sell, sell on every rally, sell on every breakdown including today. Q: You have been talking about some Jindal Group stocks, what about JSW Steel which had a rally on Friday? A: All the Jindal Group stocks are selling opportunities but JSW is an exception, it is a buy. It had a sharp rally then a very decent correction and it suggests that it’s finding lot of support. So thisis the only stock in that group which could be considered to be a buy for us. Friday’s rally could see more strength coming in, that depends also on the broad market but this is one stock where we should be buyers. Q: What about the TCS chart, what is that suggesting in terms of supports? A: TCS has reached Rs 1,060, which is almost its earlier low. It is very difficult to imagine that Rs 1,060 will hold on. TCS is not only a sell; it’s probably become a positional sell now, as has Infosys. Though we may see small relief rallies, some pullbacks, which is normal but there is no buying opportunity. It is on the verge of a major breakdown. Q: What about Arvind? A: Arvind is a buy; it’s not done the right things as I thought it would but at least it has not fallen more. It was a buy in my list last week also. Maybe it’s going through a choppy period. But the broad outlook is that it should rally rather than go down. I would be a buyer in it. Disclosure: I have personal holding in Hindalco.