In an interview to CNBC-TV18, Sudarshan Sukhani of s2analytics.com shares his views on the market and his preferred bets going ahead.
Below is verbatim transcript of his interview:
Q: Markets have been hitting out at 8350-8400 mark, not able to make much headway. What is the sense you are getting today with the Nifty?
A: On Monday morning we had suggested going long with a stop loss at 8300. That trade still remains. The Nifty is now pushing against the levels of about 8350.
Bank Nifty yesterday crossed the threshold of 17500, decisively moved up. I am assuming that the Nifty could make an attempt to go to 8400 and 8400 plus so the bias is on the long side.
It was always on the long side after saying that we will be in a choppy area, we should now take positions in the market and be a buyer.
Q: We have seen this typical bull market behaviour where there is consolidation for a couple of days and then a big spurt on the upside. Do you reckon that this 8400 plus number could come well before the end of this November series?
A: We had a big rally and then we had five days of consolidation, which is a lot of time and it is really a narrow range. The Nifty has been consolidating within 100 points. Unless proved otherwise these consolidations should lead to subsequent breakouts.
The market is giving us suggestion that it could breakout today, tomorrow and so, we should be on the long side. If 8400 is to be reached or plus 8400, it should happen within this settlement.
Q: Do you have any goal posts today itself or just stay long, any stop loss?
A: The stop loss is 8300 but beyond that we will just go.
Q: Do you have a buy on Reliance Industries?
A: I have been talking about Reliance and saying it is in a long-term consolidation but it doesn’t cross that Rs 1030-1040 level and so, we should be long-term buyers but it is a momentum buy, it went up to Rs 1000, it retreated and this could be a buy on dips opportunity in Reliance. This whole story is based on the assumption that the Nifty is actually putting its act together after five days.
We have two numbers coming today, IIP and then the consumer price index. I have no idea how markets react to that.
Q: You are picking Syndicate Bank to play this sector, why not Bank Nifty?
A: Bank Nifty is not a part of the stocks we discussed. It made lifetime highs yesterday and I would be a buyer in Bank Nifty if you don’t have a position. So put a stop loss and buy the Bank Nifty.
Almost all PSU banks are giving the same chart as Syndicate Bank. So it was more of a selection rather than filtering. All PSU banks are giving good charts.
Syndicate Bank is a buying opportunity. The sense we are getting is that a large base is being built in PSU banks and they are on the verge of breakouts and that is happening with NBFCs as well.
Q: What about IDFC?
A: IDFC has already seen a rally which saw a small correction and that correction may be getting over. It is a buy on dips opportunity, this whole theory of NBFC and PSUs rest on the IIP and consumer price numbers.
Q: What about Reliance Communications?
A: RComm is a stock that has been a distinct underperformer. Perhaps this underperformance is going to end, there is a base, a small rally, a correction and a resumption of that correction is likely. I would be a buyer here.
Q: Do you have Reliance Power as well on your list?
A: The same story as RComm although they are completely unrelated but the management is the same. A big bear market, a base building exercise. Reliance Power has been an underperformer even in power stocks but that may be getting over. It is not only a day trading opportunity, but both RPower and RComm are opportunities for building a position. You could buy now and wait for a few weeks.
Q: Have you also picked Tata Power today?
A: I had so many NBFC and PSU banks. We had to filter it out simply because of those numbers that are coming. Tata Power is a better stock in the power sector as compared to RPower, you have build a position there. Here the rally has not seen a decline, it has just seen a consolidation, I think it is an outperformer.
Q: Good opening for the market, infact we have a lot of front liners from influential pockets that are moving higher. Any fresh ideas that you have after looking at the way the market has opened?
A: Apart from the financials IT has a small correction and is looking up. Focus on the five big names including Infosys, Tata Consultancy Services (TCS), Tech Mahindra, Wipro and HCL Technologies, there is a day trade on the long side.
Q: Any trade on any of the pharma names?
A: Yes, Sun Pharma and Dr Reddys, the things that are happening in IT are also working out in pharma where a mild correction may be getting over today. If the Nifty does rally today it will be an across the board rally, not confined to banks.
Q: Anything in the mid to large-caps space that stands out for you? Like the Adani’s, any of those kinds of stocks?
A: Adani Ports is an opportunity but it is already up 2.50 percent and so, it is not fair to run after it now. Adani Power adds to Reliance Power and Tata Power group that I talked in the morning, all three are attractive.
Q: Power Grid had a fabulous rally but today it is under pressure post earnings. Would you buy it on a dip?
A: I would not because there are so many other opportunities that we have just discussed. So why should I pay attention to Power Grid now.
Q: Bunch of auto ancillaries Motherson Sumi, Bharat Forge - it had very good numbers and the whole host of others in that space, are you having any strategies to suggest?
A: Bharat Forge is a buying opportunity again on an intraday dip or an intraday consolidation. I would stay away from Motherson Sumi for sometime now, it is a favorite but it doesn’t have to be bought today.
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