Defensives are likely to be in focus now because base building seems to be happening over there according to SudarshanSukhani.
Sudarshan Sukhani of s2analystics.com believes the market trend is definitely up although he is not sure if the it will make new highs. He recommends going long in the Nifty, as well as the Bank Nifty. Even for people who don’t have positions, going long still justifies, he adds.
He is a bit cautious on the Bank Nifty than the Nifty because the Bank Nifty had a stupendous gap-up but nevertheless position in both indices is recommended.
According to him 8,450 should be the stop loss for the Nifty and 19,000 for the Bank Nifty. It is tight for the Bank Nifty either it goes up or we get stopped-out, he adds.
Defensives are likely to be in focus now because base building seems to be happening over there according to Sukhani. Pharma according to him is bottoming out and so he likes Sun Pharma.
Gold at the current levels is worth buying into because it has broken out of bullish head and shoulder pattern,says Sukhani in an interview to CNBC-TV18.
Within the private banks he likes ICICI Bank. He is also bullish on GIC Housing Finance and Bharat Forge as intra-day buys.
ONGC he says has been in a narrow range but maybe building a base and so if it starts to go up then there is likely to be a rally.
Bata India has been a long-term investment buy but it is also a short-term trade as well now, adds Sukhani.
Below is the transcript of Sudarshan Sukhani's interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.
Latha: Do you think we are returning to all time highs?
A: It is very difficult to put targets on any move. We have been long since 8,400, that is the easiest I can say and that the trend is up. At 8,300-8,400 we had said let us buy; it is never easy to say this market will go where. So, I don’t know whether they will make new highs or not but we must be long, that is easier to answer. So one part is that we should be long and even for people who don’t have a position, it still justifies going long in the Nifty and the Bank Nifty - both the indices even at current levels.
Latha: Would you be a little more cautious on the Bank Nifty?
A: Little more cautious as compared to the Nifty yes, the Nifty is probably an easier buy as compared to the Bank Nifty mainly because the Bank Nifty has had that stupendous gap up and so a lot of the cream may have been taken away but within those limits, you need to have positions in both the indices.
8,450 should be the stop loss for the Nifty and 19,000 should be the stop loss for the Bank Nifty. It is tight for the Bank Nifty either it goes up or we get stopped-out.
Latha: On Friday we also saw this movement away from cyclicals and beta to defensives, pharmaceutical variety of stocks, would that be a worry since the market is now starting to look for quality?
A: I cannot answer that question directly, I don’t know the direct relationship between defensives and otherwise but pharmaceutical is bottoming out. So, pharmaceutical stocks are looking very attractive as a buying opportunity. So to that extent, I would say pharmaceutical is now coming into play.
Latha: Are you getting a sense that the bigger, the heavyweights will outperform midcaps in the short run?
A: Yes, that seems to be so and it is much easier to predict the heavyweights if the Nifty and the Bank Nifty are aligned which they are.
Latha: What about gold, we have seen it bottoming out in global markets, anything that you are reading there?
A: Yes, gold has broken out of a bullish head and shoulder not only in the Indian currency also in dollars and it is a buying opportunity, it is not a day trade but it is worth buying into at current levels.
Latha: The markets have opened almost with a half a percent gain, so for those who don’t have fresh longs yet again would you recommend that you can go in?
A: Yes, for those who don’t have long positions, it is still possible to go and buy the Nifty, the Bank Nifty. I am not so sure about the CNX-IT, so I have talked about these two indices. Your stop losses still remain at 8,450 and that is okay and 19,000 for the Bank Nifty. Obviously as prices go up, the risk increases but people who have missed out, do have an opportunity to maintain long positions.
Adani Ports is in a narrow range and could easily be looking to a breakout and second stock that we are tracking is Cipla apart from Dr Reddy’s, which we talked in the morning, Cipla also seems to be attractive
DISCLOSURE: My family & I do not have positions in the stocks discussed.
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