Realty to bleed if market goes down: Sudarshan Sukhani

Until the Nifty breaks below the 5,200 mark, it is advisable to not take any short positions, said Sudarshan Sukhani of Technical Trends. "If the market closes significantly below 5,200 levels, it will give a clear message that the short-term trend has changed to neutral," he told CNBC-TV18 in an interview.

Sukhani would still remain a buyer and go for long positions. If the market stays choppy, he feels real estate will be the next space that would be hit after infrastructure and metals space.
According to Sukhani, PNB and Bata India are good buying opportunities once the market stabilises. However, despite a remarkable rally, DLF is in his short selling list. He recommended a sell call on the metal stock Sterlite as well. Here is the edited transcript of his interview. Also watch the accompanying video. Q: How would you approach trading on the index given the global context?
A: The chances are that we will open around 5,200 levels. If the Nifty closes below that level, I would close all my long positions as they are short-term in nature.
If we are giving up 50 points at the open, short selling will no longer give us the needed comfort. I will sell at the lows after a gap down, which is not a good idea given that short term momentums still remains up.
The idea is to look for a consolidation and whether that consolidation breaks out on the upside by the Nifty. Q: If you get an intraday pullback from the 50-60 points gap down wherever we start, would you look to add any short positions or will you not take any shorts till 5,200 breaks down?
A: I will be long. I will not take any short positions till 5,200 breaks down. I am looking at a close below 5,200 levels and rather decisively. Significantly below 5,200 levels will give a clear message that the short-term trend has changed to neutral. Q: Would you sell some of the individual stocks like the high beta spaces real estate? You have a short call on DLF today.
A: DLF has done a remarkable rally, but it seems to be over now. If this market comes down, then real estate will be hit after the infrastructure and metals space.
Even on a gap down, DLF has rallied so much that there could be significant downside enough for traders to make money. DLF is in the short selling list. One should keep a tight stop at Rs 242 levels. Intraday traders should look for the modest decline, but it could start a longer down trend. Q: Are you buying some of the relative outperformers from yesterday like PNB?
A: PNB has made a beautiful chunk. People should go and buy calls in the afternoon before closing. This remains a very good idea rather than buying futures, where there are inherent risks. Buy 1,020 calls in PNB.
The cost of the call should be around Rs 26-27 that is a stop loss. Wait patiently for the full month to pan out. You never know what you can get.
Even for individual traders and investors, PNB has completed a two month basing pattern and came out yesterday on the back of results. The chart will now control the trend.
PNB is an excellent buying opportunity for day traders and position traders. You would actually get it lower because the market is opening lower today. Q: Is Bata India the same case? Are the charts looking good to buy regardless of weakness in the market?
A: After a sharp correction, Bata India fell from Rs 725 to Rs 600 and when this market was rallying for the 15 days now, it was gaining strength everyday.
Back to back gains for the last 15 days has brought the stock to Rs 700 plus. This is the point where it starts making life time new highs. Lifetime new highs are bullish and in a depressing market, life time new highs being made by stock is very good news.
Bata India is a buying opportunity. The markets will open lower. Smart traders understand that it is good to give some time to the markets for the initial choppiness to be over. PNB and Bata are buying opportunities once the market stabilises. Q: How much downside do you see for Sterlite in the immediate-term?
A: I have a target of Rs 112. It's very disappointing because this stock was trading at Rs 180 and appeared as if it will go to Rs 200 plus, but it never happened. The level of Rs112 is not the ultimate target and could easily be broken. Metals look very bearish. Sterlite is part of the metal pack, where you want to sell. This is very good reason not to buy the stock. Q: If you do get a mild gap down of 40 points, what kind of Nifty strategy would you have? Would you buy the futures or would you want to do any kind of options cherry picking?
A: I trade the Nifty extensively. It will be both ways. If the Nifty remains above 5,200 and consolidates, I would buy futures in any break out from that consolidation. We have to give sometime for the markets to stabilise. If that sense of stability comes, I