Bull market intact; buy dips, keep stops: Sukhani

Sudarshan Sukhani of s2analytics.com reiterates his earlier view that the bull market is still intact and corrections are just an aberration, the short-term trend is definitely.Sukhani says, the Bank Nifty and Nifty are in a confirmed uptrend despite corrections, so stay long and use dips to buy but keep your stops.Globally, for the Dow and S&P 500 the trend is up and there is nothing that would change that.The dollar according to him is entering a long-term bull market, which could pose some problems for the rupee although rupee may out perform other Asian currencies. He would be long the dollar.For the day, Sudarshan is upbeat on Hero MotoCorp, Wockhardt, TCS and Tata Communications but has a short sell on Tata Steel.Below is the transcript of Sudarshan Sukhani\\'s interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.Latha: What sense you are getting, the Nifty has had some really confusing and volatile moves this week?A: The Nifty has gone through a minor correction yesterday and that tells you the theme that I am looking at. We are in a rally and that rally was confirmed when 8,200 was taken out decisively. In any upmove we are going to have days which will be down days or even narrow range days, sideways moves, the upmove is not relentless. It is not ones sided and that is normal. Yesterday was part of a corrective decline, the trend doesn’t change, the short-term trends are intermediate trend is up 8,200 is our benchmark, a close blow which will then force us to reappraise the trend but not yet. So the trade is if you are long stay long, if you are not then use this dip to buy and of course the trade can go wrong so keep your stops.Sonia: What did you make of the dollar index going above the 90-mark and what kind of an effect would it have on the Indian currency now?A: I think the dollar is entering a long-term bull market and it is rather worrying what kind of affect it will have on the Indian rupee. Maybe the rupee will outperform other emerging market currencies but we could still go lower as the dollar becomes stronger.I would assume that while rupee could outperform relatively, it could become weaker. So I would try to be long dollar whenever I can.Sonia: You would buy Tata Consultancy Services (TCS) today? A: Yes. All the IT stocks have gone through a correction, there was a sharp rebound and that rebound hasn’t taken place in the sense the new rally hasn’t started but they are standing at resistance. The resistance for TCS is somewhere around Rs 2,500, it is inching upwards. I would expect this resistance to be broken and a new upmove to start. Therefore, TCS is a buying opportunity for the swing trader, for the day trader.

Latha: The Dow has reclaimed its all time highs; the Nifty is still a distance away, how do the two couple and what is your call on the Dow or the S&P 500?A: The Dow and the S&P 500 which is a more widely tracked index suggests that the bull market there is intact. From 2011 onwards the US bears has been calling the end of this bull market in America so many times and they haven’t called it correctly – that continues. So, the trend is up; I do not see anything changing except that the rate of rally, the rate of growth in the market may change some time but the broad view is that it is going higher. That is the view we have for the Indian market too. Sometimes we underperform and sometimes we outperform. I wouldn’t pay too much attention to the fact that the Dow has reclaimed its old highs and we haven’t. We will.Latha: You have IndusInd Bank in your buy list and also tell us about the Bank Nifty?A: The Bank Nifty had a similar decline yesterday. I am treating this as a one day or even if we fall today, it is a correction in what now is a confirmed uptrend. If that is so then IndusInd Bank is in a trading range. I would buy it as it breaks out. Sonia: The other stock that you would like to buy today is Hero MotoCorp?A: It is a trading range which is on the verge of a breakout and because of dip yesterday, all these stocks haven’t broken out. So the buy is in anticipation of a good move either today and if not be today because it’s Futures and Options (F&O) expiry then on Friday. Latha: You are selling Tata Steel?A: Tata Steel has been a short sell and yesterday it had a big decline and it hasn’t participated in the rally. Metals as such has been underperforming and I am downbeat on metals which means this stock could go lower even as the market stabilises or goes higher. This needs to be taken in context because there are five buying opportunities and one selling, sometimes viewers would pick out because they would use their bias and pick out the sell and forget the buys – that doesn’t happen. You just take a short sell amongst the many buying ideas. Latha: You would be negative on the other metal stocks as well?A: I would be negative on all the metal stocks. If there is a rally, for example in Hindalco or Sesa Sterlite (SSLT) then that’s a shorting idea.Sonia: What are the levels to watch on Wockhardt on the long side?A: It has been in a trading range, it fell down on the back of news but the trend is now up and that trading range like many other stocks is on the verge of breaking on the upside. I do not know if that will happen today or Friday but it should come about. So for Wockhardt my swing trading target is Rs 1,025 but for all the stocks we discussed because the market is choppy follow your stops.Latha: What is your view on Tata Communications?A: Tata Communications had a sharp correction but it is coming out of a very long trading range, it is almost breaking out from a multiyear range, something is going on there. Again it’s breaking today so for short-term trader it is a buy, for the long-term investor also there is an opportunity here.

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Latha: Any fresh calls on the Nifty, such a flat opening, you can accumulate longs if you don’t have them?A: You can accumulate longs if you don’t have them. Your stops are 8,190 on closing basis, not intraday because some volatility is expected today. Therefore, for short-term traders follow your stops, be on the buy side of the market, for intermediate traders, position traders your stops are 8,100. We keep on talking about stops and not about targets because this market can go anywhere on the upside.Latha: Your views on UltraTech Cement and Jaiprakash Associates?A: UltraTech is in a strong bull market, every dip in it is a buying opportunity. JP Associates is a complete avoid. There are two cement stocks that are worth looking at – one is UltraTech and other is ACC which is building a large base and I suspect will come out of it on the upside.Sonia: The best performing stock this month has been Coal India and you have been bullish on this. It is up today as well – beyond Rs 386 levels do you see more upsides?A: I think so but Coal India is not a day trading stock and it shouldn’t be. This is a market that rewards investors, buy Coal India, hold it, you will see much higher levels. At Rs 385 it is breaking out of a long trading range, so this is a right time to enter it.Latha: Anything else that crops in the mind after the markets have opened that you have to recommend as a strategy?A: Cipla was in a trading range and should be breaking out on the upside today. Generally pharmaceutical is now coming out of a correction, Wockhardt and Cipla are the preferred choices but you could buy any of the top pharma stocks and do well. Sonia: Do you think NTPC has formed a base at Rs 128 levels it hit a couple of weeks ago and do you see higher levels there now?A: It seems so. It is a laidback stock. My point is why would want to buy NTPC when you can buy Coal India or ICICI Bank, but for somebody who looks at NTPC, it is building a base.Latha: What about Zee Entertainment. It saw rapid rise from August to October but now is there any strategy, any position?A: Yes, the strategy is to wait it out. It is going through a mild correction, it is sideways primarily, let it finish that but Zee for some reason is going to go much higher. Latha: You didn’t give us the contours in Bank Nifty. You told us about IndusInd Bank but what are the levels to watch out for in Bank Nifty, the stops, potential targets if there are?A: 18,400 would be the stop for the Bank Nifty and we let the market take wherever it goes but we should follow the stops on the downside.Latha: Any levels for crude, if you were a positional trader over the next quarter what is it saying?A: I track Brent closely and at this point I do not have an opinion. It is now choppy and sideways so normally what happens is if you have a short trade then this is the time to take profits and get out.