Technical analyst, Sudarshan Sukhani of s2analytics.com spoke with Latha Venkatesh & Reema Tendulkar of CNBC-TV18. He shared his reading and outlook on the market and also gave recommendations on various stocks.
Below is the transcript of Sudarshan Sukhani's interview CNBC-TV18.
Reema: We are likely to see a gap down opening today. What is your recommendation?
A: Last week when we reached 8,400, the suggestion was to take profits and step aside because a lot of choppiness can come in. In retrospect it was a good advice; choppy market do not make money for anyone. The Nifty may open 100 points lower if the SGX is any indication and after 100 point decline it is not a shorting opportunity. It is only a sign that the resistance levels at 8,400 are holding which is what we suggested earlier.
So what is the trade now? The trade is to assume that this market rally is over, which means we can go back to 8,400-8,450 - nobody can count that out but it is unlikely we are going to 9,000 or 9,000 plus. Therefore, the trade is to be on the short side of the market. If you have one-two month's view then on every rally accumulate Puts and take a view that the Nifty will crack 8,000 sooner or later - that is an intermediate term trade. However, for today there is too much choppiness, 100 point decline doesn't justify going short and certainly not going long.
So take intraday trade on the short and long side for few points.
Latha: At the moment we are faced with an international event which has taken Asian markets about 1.7 to 1.9 percent lower. The SGX Nifty is starting 100 points lower. So you are saying that we should take short positions but it is quite possible that it is going to be gap down maybe 50-70 points gap down. What do you do if the market starts at 8,200 or 8,180?
A: This market is not going higher so one should accumulate short positions on every rally. After 100 point decline, which is likely for the Nifty today, for an intraday trader there is no way of saying the Nifty will fall another 50 or 100 points, so that an intraday trader can make money. We do not know. It is very unlikely. However, for the day, just on the gap down open, a new short position is not justified. Take a short position on small, minor rallies and buy Puts rather than sell Futures because this is a process that will take some time but the market is heading down.
Latha: How you trade the Bank Nifty. Is it more vulnerable?
A: It is much more vulnerable and one could buy Put in the Bank Nifty and wait patiently. There is no intraday trade after 100 point gap down but there are positional and swing trades. So for Bank Nifty it's far easier to buy Puts which essentially is to say start building short position.
Reema: Where do you see support on the Nifty?
A: The Nifty support is at 8,000. I think 8,000 will not hold, will go much lower than that. My only point is as a matter of tactics, do not go short for an intraday trade after 100 point gap down - that is not wise.
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