Go long in Nifty, Bank Nifty; buy midcaps: Sukhani

Sudarshan Sukhani of s2analytics.com believes that the bottom for the market is in place because in an uptrending market the lows come in quickly. He advices one to go long both in the Nifty and the Bank Nifty with a stop of 8100 and 18400 respectively.For the day, Sukhani is bullish on a bunch of midcaps like Canara Bank, Arvind and TVS Motor.According to him most PSU banks offer themselves as a buying opportunity as the uptrend in these stocks is confirmed. However, he is not so bullish on the private sector banks except ICICI Bank, which is a buying opportunity on every dip.Arvind, he says has resumed its uptrend and so is trading pick for the daySukhani is not so upbeat on the ADAG pack although some like Reliance Capital have done well. He has a sell on Reliance Infrastructure because it has been falling in a rising market.Answering a query on if Brent crude is likely to see further downside, he says it may not fall because there seems to be a trading range developing for it..

Speaking about pharma pack, he says although he is upbeat on Aurobindo Pharma the other stock could also do well. However, these stocks are not short-term opportunities, you have to give them some time, he addsExide Industries according to him is only a positional trade and not a short-term tradeBelow is the transcript of Sudarshan Sukhani’s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18. Latha: What is the sense you are getting on the Nifty, the manner in which it could end on Friday with some amount of green indicates that a bottom is in place?A: Yes, it does indicate and why we are eager to anticipate and early to anticipate a bottom is simply because we are in an up trending market. In an up trending market the lows come into place quickly and the highs are unknown. So, it is quite possible that the brief correction is over; we have made a short-term low around 8100 that is our stop loss for Nifty. On Friday we suggested we should go long, I am repeating it. Fortunately there is not much difference between Friday and Monday, if you are not long you should be long in the Nifty and in the Bank Nifty; keep your stops just under 8100. It starts with a wide stop, hopefully as the week progresses it can be tightened up. Sonia: Since you are long on the markets you don’t have too many heavyweight or Nifty stocks that you would advise buying today, most are from the midcap bunch, why is that? A: That is a very fair question, the reason is that we have already talked about the Nifty today and there are a lot of opportunities suddenly coming up in midcaps. Midcaps are high beta instruments; if this is the end the year, the beginning of the next year usually is a nice pleasant time for the market. So, the idea is, we are already there in the Nifty, in the index, in the bank index let us also go into midcaps and see if we can catch some more alpha. Latha: I missed your stop loss on the Nifty. What was the Nifty stop loss and what is the Bank Nifty stop loss? A: The Nifty stop loss is 8100 whether you are a positional trader and you have not been stopped out if you were a positional trader even during the correction. Bank Nifty stop is 18400. Latha: Canara Bank, is that the only one or do a bunch of PSU banks offer themselves? A: A bunch of PSU banks offer themselves for buying and all of them have made large bullish head and shoulder patterns, broken out. We have talked about it lot of times, it has been a favorite sector. Now what is happening is that the up trend is already confirmed, we are simply finding opportunities to re-enter that up trend or to enter it again and again. Canara Bank is offering one such opportunity but even Bank of Baroda(BoB) is doing the same, non F&O stock Corporation Bank is doing it, so there are plenty of them.Sonia: Has Arvind resumed its up trend? A: Had seemed so because after that sharp decline it made a very attractive textbook pattern, a bullish head and shoulder and it has broken out on Friday. Now, these are normally reversal patterns that tells us if not anything at least a eventual rally to the earlier highs of Rs 330 is possible. That is a lot of move from the current levels. Latha: The underperformers on Friday and some days last week were the private sector banks. Yes Bank, IndusInd Bank, ICICI Bank were not the ones that helped the indices end in the green. Is there any strategy over there or is it just avoid? A: At this point it is easier to go and trade in the Bank Nifty and in the PSU banks. Private sector banks are likely to be a little laid back and the Bank Nifty itself may not be an outperformer; it will perform. That is probably because the private sector banks don’t offer the same chart patterns. So, it is probably better as you said to avoid them except for ICICI Bank which is a buy opportunity on every dip but today other banks are much better, PSUs.Sonia: You have a buy on TVS Motor this morning?A: I said that I missed TVS earlier when it was rallying but good stocks do not stop like Asian Paints. There was a small correction and we thought it is all over. It is not over. It is on the verge of making lifetime new highs again and it is a continuation head and shoulder bullish pattern, a bullish pattern after a strong rally that tells us much more is coming. So these are trades, not just for day trades, for swing trades, the targets are modest, they have to be but Arvind and TVS are also positional ideas.Latha: Bharat Petroleum Corporation (BPCL) has been a ranked underperformer from November or so. Why a buy today?A: That is the hope trade. It is coming to a potential support level. If the support holds then we are buying at the lows. If it doesn’t then we get stopped out.Latha: What is crude doing? We saw it try and make that jump above USD 60 per bbl but could not do that again gone below USD 60 per bbl. Is there a more serious fall coming?A: Not now. I do not think so. A much larger trading range is probably developing rather than expecting crude to go below USD 57 or USD 56 per bbl, the Brent. I would expect a trading range, but that is good news because if a trading range develops at least it tells us that a similar v-shaped rally is not coming – that doesn’t show itself now. Sonia: What is your target price on Castrol India?A: The targets are modest; Rs 530 for swing trader but Castrol has been going in a dream run. It has gone from Rs 350 to Rs 500, it had a minor correction and this minor correction is a buying opportunity, one can swing trade in it, one should be taking a position in it also. Castrol is a midcap but it is a blue chip. Latha: You have a sell call on Reliance Infrastructure?A: It is doing nothing. It keeps on falling in a rising market. It has fallen so much, a small consolidation could easily break on the downside, again a warning - short-trade should be taken only together or in conjunction with long trades. Latha: Would you have any view on the other ADAG stocks because couple of them have done well like Reliance Capital?A: They have. Reliance Capital also because of some news but the chart is not conducive and not only that even Reliance Power charts have turned uncertain, so I would avoid it.Latha: This is a fairly strong start that we see to the Nifty, what is the strategy now, accumulate more longs even at this level? A: Yes but it started very mildly in the morning so anyone who was listening at it 8:30am could have bought at much lower prices. Short-term traders have to time their entries and get the best they can. However, even now there is a possibility that you can buy the Nifty, the Bank Nifty as well as the CNX IT; all three are worth buying into. This rally should have more leg.

_PAGEBREAK_Sonia: The big gainer from last week was Jindal Steel and Power (JSPL) and this morning as well it is up another 2.5 percent. Do you see another trading idea in any of these metal companies including names like JSPL? A: JSPL is a momentum driven rally that we are seeing and only savvy Nifty traders, I mean people who can enter in and enter out fast should consider it. Since most of us can’t do it, I would say stay away from all metal stocks.Latha: I was going to ask you that because today all the metal stocks are up but you favour none at all? A: Not at all, none of them and in fact if this rally continues into tomorrow they would become short selling opportunities. Latha: Any other attractive candidates in the Nifty itself, we spoke largely about midcaps but at this point in time the Sensex and the Nifty have leveled their performance with the midcap, would you want to pick up any heavyweight winners for strategies? A: Yes, State Bank of India (SBI) is another of the Nifty heavyweights although it comes in the PSU bank category but it is independent. That is a buying opportunity. Among the NBFCs, Rural Electrification Corporation (REC) is a buying opportunity. So, the opportunities exist. Pharma is likely to do well in the next two or three days, it has gone through a deep correction. In pharma you can consider looking at Aurobindo Pharma and that is just one name that I am tracking. However, I am assuming that a lot of pharma companies should do well. Sonia: You did pick out one well traded name TVS Motors which has moved up quite well, what about something like Exide which has been picking up pace, is there a buy idea there as well? A: That is a positional trade. I don’t think you should be taking a swing trade or a short-term trade in excise; it may not work.

Latha: Your view on Jet Airways?A: We have been upbeat; my suggestion was to take profits and step aside and wait for new patterns to come. I would not but Jet Airways at current levels.Latha: Wockhardt, it’s been a standout performer last month, your view on Wockhardt?A: It’s come in our buy list few times but pharma generally is not a short-term opportunity. If you want to make some money you have to give it time. If you buy Wockhardt today then you’re really looking at something around 2 to 3 weeks to really let it flower.Latha: What kind of a chart is that, a year ago Gujarat Gas was Rs 250 now it is Rs 800 and the move in the last two weeks have been from Rs 550-800? We must pull up the one month or the three month of the chart to give the idea of the rally in this stock. Not a time to buy now?A: It is not a time the rally has been so sharp and stupendous those who own it may like to hold it because this rally is given us a message that there is a strong trend here. I would not advise buying not until it corrects.