Nifty is in a range, don't put money now: Sudarshan Sukhani

On Friday, the Nifty fell 28.65 points and closed at 5,386.70. The Sensex was down 67.01 points and ended at 17,783.21.

Sudarshan Sukhani of s2analytics.com says, the market has gone into a narrow groove. "This is not a buy on dips market because we are in a trading range. So, there is essentially no dip or no rally. It’s just a momentum inside the boundaries. So, do not put money on the Nifty, till it moves away," he adds. Below is the edited transcript of his interview on CNBC-TV18. Q: What is the expectation on the Nifty this morning? A: Soon we won’t have any expectation. The market has gone into a narrow groove. Trading ranges normally resolve themselves on the upside or on the downside. We just have to wait. Whatever long positions we have, they are about 10% of our normal volume. When the Nifty breaks above 5,300, below 5,350, we will close them. Otherwise, the long positions remains. New additions for us as well as for traders, who want to now build positions, should be done only if the Nifty starts going up. This is not a buy on dips market because we are in a trading range. So, there is essentially no dip or no rally. It’s just a momentum inside the boundaries. So, do not put money on the Nifty, till it moves away. I do not have anticipation on where it will go, except that it will go somewhere. Q: You think Jain Irrigation Systems is picking up again? A: We had a sharp correction - Rs 94 to Rs 74. That is almost like a bear market, but still support levels are held. We saw the first sign on Friday that support is holding and the stock is rallying. I think this is a buy on dips opportunity. Now the rally may or may not start immediately. It is difficult to say because some stocks will go up irrespective of the Nifty. So, Jain Irrigation is a buying opportunity. If this is not a dip, this is something else then, we have a stop loss which is why traders should follow discipline. But buy it. Q: You see more strength in Aurobindo Pharma? A: We have seen a lot of these corrections in many stocks. These corrections have stopped short of their earlier lows. That told that this is a deep correction, but not a resumption of their bear markets. The same thing applies to Aurobindo. It’s not just Friday, Aurobindo Pharma is showing upside momentum for the last five trading sessions. That is a good enough reason. At this point it is willing to break above resistance level. It is minor, but still it’s a breakout. So, if Aurobindo shows any strength today then it’s an intraday buying opportunity as well as swing trade for few days. Buy it - it is in a good sector. I would think there is money on the upside. Q: You are bullish on Tata Motors’ differential voting rights (DVR) from a trading perspective this week? A: Yes. We were thinking that Tata Motors has gone to the dumps and then it revived itself. Tata Motors’ DVR usually gives little more volatility as compared to the equity or compared to the original derivatives. So, it is more interesting to trade the DVR. It rallied on Friday. It is at 50 days high - that’s bullish. So, Tata Motors’ DVR is probably one of the better opportunities today. But wait for the first 15-20 minutes. If momentum is building up then I think it’s a day trade. Q: You have a sell on Aban Offshore today? A: Aban has made a double top and it is consistently falling and failing to cross that resistance level. It’s been a sort of uncertain stock. It rallied. There was some buying opportunity but the broad trend of the stock seems to be still on the downside. So, I would assume that this double top is going to play itself significantly lower. This is a sell today and a sell repeatedly perhaps. Q: Hindustan Oil Exploration Company (HOEC) is on the buy side in your list? A: Very deep correction, just as we saw in Jain Irrigation, in Aurobindo Pharma. That deep correction stop short of 100, which means that it was not a bear market, it was – as I would believe – just a correction. HOEC is now inching upwards after that correction. This could be the bigger move. For those who are technically inclined, this could be wave three of an uptrend which is the move carrying the most momentum, not just here in HOEC, in a lot of the charts that I have discussed today. It is worth buying. But we should be on the long side. Today it seems, a lot of these stocks could begin some momentum and just wait patiently. Let us see the signs of momentum appearing on them intraday and then go long. Disclosure: I have no holdings in the stocks discussed. _PAGEBREAK_ Q: You have a sell call on BGR Energy? A: BGR Energy has been a disappointment. It is making new lows. New lows should be sold into. It has been a sell earlier also. I cannot find a reason why it should do that. But it is easy. This is a stock that’s making new lows, go short it. Q: How do you approach Exide Industries? A: I would buy it. Exide is a stock that has been correcting, that correction has held on to its previous lows. So, these are deep corrections that could portent better time to come. I would be a buyer. We have seen a good day on Friday and that should continue. Q: Would you still be bearish on GMR Infrastructure? A: Yes, I would be. It is true that on Friday the stock bounced back from its extreme lows, but it’s at Rs 19. We do not buy these shares. It also made all time new lows on Friday. Just avoid it. Q: How do you expect Coal India to pan out? A: It is very gratifying. Coal India is one of the better stocks. Traders can simply focus on this and anytime there is a dip or consolidation, buy it Q: Do you expect more upside on a name like Infosys? A: Generally yes, but that doesn’t mean it should go up today. It has seen a remarkable rally. So, it could go in a consolidation but the trend is up so we should be buyers. Q: What about Tata Steel? A: Tata Steel is disappointing. It has broken down support levels repeatedly, the rallies have been tepid. The idea that maybe this is support and we can see an upmove is completely cancelled. It is a short sell and the eventual target for this, not day trading, but eventual targets could easily be Rs 360 or so. Q: Is there a more downside in Axis Bank? A: The point is that Axis Bank is one of the outperformers. So, we have to assume that an outperformer will continue to maintain its status. In that sense Axis Bank is not a short sell. A correction is possible – that’s a different issue. But I would be a buyer in Axis Bank as well as in ICICI Bank whenever an opportunity arises. So, this particular bank is not a short sell. In general we saw how banks have faired, very poor. Most public sector undertaking (PSU) banks continue to remain on the short side. Q: Where would you advocate a stop loss for people who are holding on to their long? A: 5,350 – there is no doubt about it, that’s the level. In fact, because the market is not going anywhere we cannot shift it up. But that’s the failsafe stop loss. Do not hold longs below that level.