Nifty may see larger decline if it breaks below 8k: Sukhani

A: On Monday, I had suggested that we should close all long positions in the morning and the idea was that this market has seen a rally and that rally is coming to an end, that view still remains. The levels of 8,500 are now essential for a new uptrend to continue, that means till we don’t take out 8,500 we are either in a sideways market or most likely we are resuming the downtrend.

On the downside 8,000 is an important support zone. A break below 8,000 will then tell us that a significantly larger decline is in the offing. It does appear that we will reach 8,000 and also break it. The question is when market will do so? Given the fact that the bearishness has again asserted itself, the trade should be on the short side. I don’t think there is a day trade here; you take a short position using June options and stay with it.

Sonia: We have given up on this 8,300 mark. You were telling us earlier in the day that one should take a shorting opportunity or position in this market. Would you let that position run through the day and at what level would you close it?

A: It is not a day trading idea because tomorrow is future and options (F&O) expiry and I don’t know how market behaves in the last two days. The idea was to take a short position using June expiry Puts and then hold on to them. For day trading, traders will have to judge this market. There are so many methods of day trading but for today the view is that this market is sliding lower so take a position and keep it.

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