Keep taking long positions but in low volumes and keep taking profits, advises Sudarshan Sukhani of s2analytics.com to traders at a time when the Nifty is breaching new highs on a daily basis.
Speaking to CNBC-TV18, Sukhani says the Nifty is now closer to the point where it will pause and consolidate.
Sukhani advises staying away from Bank Nifty barring IndusInd Bank.
Below is the verbatim transcript of Sudarshan Sukhani's interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.
Latha: Do you think the global markets will cast a shadow today or would you still remain long?
A: The trend is up and we have to see the context. The American market has been falling for two days and we are not bothered and worried. However, we are outperforming, the relative strength is much stronger, there is only one view as of now either you are out of the market thinking that we had a good time, let us step aside till the market consolidate or remain long. Any minor dip or correction should not be used to go short – that’s the only way we can approach this market. Ideally keep some small long positions and keep on taking profit. We started suggesting profits from 8800; 8780 onwards and that is probably a sensible idea. At some point we will pause and consolidate. We are probably closer to that point. So stay long, stay out of the market, do not go short by any chance and there are no levels because these markets that make new highs are telling us that there are no resistance levels.
Latha: What about the US market. How much would you be worried about the dip, where are the supports, where is the S&P 500 on the Dow headed?
A: The S&P 500 is giving signs of building up a distribution pattern. The repeated foray is downside, sharp corrections that it is now going through for the last 20 days tells us that there is selling coming in and this is the first sign of a possible distribution. We have to be very careful when we call the end of a bull market, it is not sensible but the chart there suggests that a deeper correction could be in the offing. The American charts are almost starting on a distribution but we are not doing that.
Latha: Take us through private sector banks and public sector banks because yesterday public sector banks were rank underperformers?
A: They were and the charts are suggesting that a possible breakout and higher levels are not coming. Yesterday it was entirely the private sector banks and so my sense is that the Bank Nifty is now stalling. It is very risky to make these comments. Just as CNX IT performed rather badly yesterday, it seems that the banks have come to a point where they will stop.
Latha: So there is no trade on the Bank Nifty now, only on IndusInd Bank?
A: Yes and on Nifty. I would stay away from the Bank Nifty.
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