Nifty may not breakout in November series: Sukhani

Technical analyst Sudarshan Sukhani of s2analytics.com sees no early signs of the Nifty breaking out in the November series. "Yesterday's price action in the Nifty gives nothing to us in terms of indication," he said in an interview.

The Nifty closed above 5,700 levels, gaining just 1 percent in the October series following a smart upmove of 6 percent in previous series due to reforms announced by the government and unlimited bond buying plans by Federal Reserve & ECB in September. Also Read: India faces investment cliff; new sector drivers needed Sukhani is not upbeat on the market till it corrects or breakouts. He sees no significant positions in the Nifty. Below is the edited transcript of Sukhani's interview with CNBC-TV18. Q: Is there anything that you are sniffing on the charts of the Nifty that indicates a breakout this series? A: No, not now. It would be nice if I could say that, but yesterday's price action in the Nifty gives nothing to us in terms of indication. It was just in a trading range, we have seen these ranges for the last three weeks. My sense has been that the market will correct before a sharp rally comes about, but that hasn't happened. But because I am not upbeat till a correction takes place or till a breakout takes place there are no significant positions in the Nifty. Let the Nifty tell us what it wants to do. Q: You think Reliance Capital could correct more? A: Reliance Capital for the short-term has topped out, it has turned around, made some kind of a rounding top and it's now falling and that correction is likely to continue. In a choppy market some stocks will always come down and Reliance Capital because of the sharp rally is ripe and ready for a correction. Q: You have a buy on Cairn India for the day? A: I have a buy because Cairn's chart tells us that it is now in an uptrend. Yesterday it fell and it could do that today, I do not know. But a stock that gives indication of a long-term uptrend is worth buying. Sometimes a decline of one-two days, in this case it is two days, sets it up for a nice rally on the upside because that is a dip or a correction. So, Cairn is a buy on dips and it's a stock I will be watching and wanting to add to today. Disclosure: I have holdings in Cairn _PAGEBREAK_ Q: Indian Overseas Bank's chart does not look good to you? A: It gives a sense of having made a double top. We have been discussing that and a lot of these charts are not conducive for a rally at all. That double top hasn't been confirmed but it could well be. All of these stocks rallied, public sector undertaking (PSU) banks rallied and now they are stalling. Some of these stocks are giving clear signs that this stall will end up with a decline and IOB is doing that. So, here is a short sell. I am not sure what the market is discounting at this point for the RBI policy but it's not something very nice. Q: You have a sell call on Biocon also from the pharmaceutical space? A: Biocon has been in an uptrend. We have been giving buys on it for a long time. So, this is not a reversal of trend. But after a sharp upmove everything corrects. In case of Biocon we have seen a bearish head and shoulder pattern, getting confirmed. That tells us that its not just a small correction, probably a steep correction is in the offing. So, for a short-term trader a steep correction is a good opportunity to take money on the short side. Biocon is a sell and I assume it will continue to be so till either the pattern is completed or it gets cancelled. Q: Are you confident of buying IDFC from a trading perspective? A: It is always difficult to step in front of results and then say I am the warrior. IDFC has broken out of a trading range yesterday and IDFC has completed its bear market. All rallies, dips and breakouts in IDFC should be bought into. Assuming that the results disappoint the market, one can always get out. Q: You have a buy on TCS? A: TCS is in a small narrow trading range for over a month even the results that came out didn't push it out of the range, not above it and not below it. These ranges are not sustainable. As we see in the Nifty, something is going to give. In case of TCS, for today, if we assume that the Nifty will be choppy, which is what I am assuming, TCS is likely to be an outperformer. So, while eventually it will follow what the broad market index is doing, TCS should be looked only for buying for the day. Take a long position on any small dip. _PAGEBREAK_ Q: We were discussing Punjab National Bank (PNB) and the possibilities of perhaps some disappointment today in earning. How do you react to the stock? A: Punjab National Bank is a short sell, just as Bank of Baroda was or Indian Overseas Bank (IOB) is. I have explained that half of PSU banks are short selling ideas. So, those who do not sell do not buy them. Q: What is the chart of Hexaware Technologies telling now? A: It is horrible. It has fallen from Rs 145 to Rs 108 non-stop. After 30 days of decline yesterday it rallied. It’s not enough. That rally could be anything, it could be just an F&O settlement or whatever, it could be a sentiment or anything. It’s not necessarily a short sell because its fallen so much, it’s a complete avoid or a sell. Q: What about Arvind? A: Arvind has a much better chart. I think it has done its bit. It's corrected a lot. It was in any case building a base for a renewed upmove. I would be a buyer in it. If there is a dip in Arvind then that's a buying opportunity. Q: What about the chart of Sintex Industries now? A: Sintex Industries has done its bit. It's rallied so there is a sense that a correction is in the offing. That doesn't change the minor uptrend that it started with and that could convert itself into a much bigger move on the upside. But as of now either we avoid Sintex or we sell it because more declines as a correction are in the offing. Q: Your view on Tata Global Beverage? A: Buy it. Every dip is a buying opportunity and I have been saying that since Rs 100. Q: What about Nagarjuna Construction from the infrastructure space? A: It is best to avoid infrastructure and Nagarjuna Construction is a sell.