Sudarshan Sukhani of s2analytics says the Nifty is poised for significant rallies in the December series and says most heavyweight stocks are likely to go much higher than its current levels.
Speaking to CNBC-TV18, Sukhani says investors should long Nifty and Bank Nifty with a stop loss of 8450 and 18300 respectively.
Furthermore, Sukhani adds that PSU banks seem good investing opportunities for now.Below is the verbatim transcript of Sudarshan Sukhani’s interview with CNBC-TV18's Latha Venkatesh and Sonia Shenoy.Latha: A little while ago we were discussing with Anuj and he was getting this feeling that this contract could see some bit of lows, at least the highs for the next two weeks have been seen. Are you getting a sense that there are not gains to be made for the next couple of weeks?
A: I am so sorry I have to differ. Yesterday we had a big event lined up and the markets refused to go down after the event. That tells us that this market is willing to go higher. Seasonally December is a very good month. This will pan out this month also. So, it is very difficult to say if we won’t make a low again in the next few days but the highs of the month are still pending, that is easier to say and charts for banks, we have talked about Public Sector Undertaking (PSU) banks they are all ready for significant break outs. Charts for some of the other Nifty heavyweights have already seen declines and corrections and may now be willing to go higher. So all said and done I do not think that the highs are in place.
Latha: No, Anuj meant only in a very short term, probably for the next couple of weeks, maybe not for the entire contract, therefore what is the trade on the Nifty and the bank Nifty today?
A: Luckily we have a trade today and we should go long in both the Nifty and the bank Nifty but we will keep a tight stop. If we get stopped out there is nothing to worry, we will re-enter. So, for bank Nifty the stop is 18,300, little lower under that and for the Nifty the stops will be somewhere around 8450. Tight stops, I expect this market to begin a rally again.
Latha: If you could just repeat your Nifty and bank Nifty targets in the rush for the land developments I missed your targets?
A: There are no targets, there are only stops because we hope the markets will keep on giving us higher targets. For the Nifty it is just a little under 8450, and for the bank Nifty it is 18,300. They are tight stop losses, if it gets out we get out otherwise we stay long.
Sonia: Let us start off with your list of stocks. From the heavyweights you have picked out Zee Entertainment to buy today?
A: Yes, Zee has been in a strong and consistent uptrend in a small trading range and a very narrow range for the last three days, that narrow range should break on the upside simply because the trend is very visibly and clearly up. So buy Zee, put a stop loss in the unlikely event that it doesn’t break out or it fizzles out and it has become a heavyweight. See how things start. Zee had gone down so much, now it is one of the outperformers.
Latha: Why only Syndicate and IDBI, the entire lot of PSU banks was running up?
A: All of them are ready. All PSU banks are willing and ready and they have made similar patterns of a bullish head and shoulder. Yesterday they broke out of that pattern, they shouldn’t have because the rates were not cut down but PSU banks are cheerful, you will have to explain why. Bank of India has a similar chart and almost all of them. We are picking up Syndicate Bank because it is just relatively better and IDBI Bank because it has been a distinct underperformer. If this starts becoming a performer also there are a lot of upside left.
Latha: What does the chart say for Karnataka Bank?
A: The chart is almost similar. It has been on a roll already and it is a breakout yesterday, so new highs should be coming in this stock. I don’t track it very carefully because I track the larger banks. A chart check on Karnataka says it is in the same league as the other public sector banks willing to go much higher.
Latha: In the same vein M&M Financial and is that the only NBFC you like?
A: No, yesterday all the financials did very well. Among them M&M Finance had a mild correction. We always like to buy on dips, so that dip maybe getting over. To that extent we are buying it at a lower price.
Sonia: From the pharma space Glenmark is on its way to become the next Lupin perhaps. It has had a stellar run in the last six months. You expect more on the upside even for a long term investor?
A: Yes, for both, for a swing trader who buys now and sells in a few days and for a long term investor who should be in it. I hope it becomes another Lupin. Pharma is on a roll, small corrections are to be bought into. Glenmark had a mild correction and that corrections came to an end yesterday when it had a very good day. So we are again buying on a minor dip in a stock that has been a clear outperformer.
Sonia: Finally you have a buy on Hexaware, so you have chosen something from the IT space as well today?
A: I am hoping Hexaware does well. It has outperformed the other IT stocks. It is in a very narrow range. Narrow ranges are normally just the beginning of another up-move. So, we are again buying in anticipation. The best location to buy is before a break out comes. We will buy, if it doesn’t work out, not all trades will then we have a stop. Otherwise it should move up higher.
Latha: All these stocks mean anything to you in terms of a trading strategy, Havells, Reliance Capital, Bajaj Electricals, they are moving on fundamental news of course?
A: Havells has been moving up steadily. It comes on our buy list very often. So, for an investor or a position trader the current levels are not intimidating. You can simply go and buy it. For a short term trader buying on news is not a good idea. So, that applies to all the three companies.
Tata Motors independently apart from any news has a very good chart, it is at a lifetime new highs and are breaking out from a consolidation. That is a short term trading opportunity.
Sonia: There are many stocks that have hit fresh highs today and Britannia is one of them, up almost 3.5 percent. This one has been hitting fresh highs every day. Either this or anything else from the broader market Fast Moving Consumer Goods (FMCG) names that would interest you?
A: Yes, in FMCG Colgate and Britannia are both buying opportunities. None of them are day trades. So the traders will understand it. If you are willing to buy now and wait for six months there is a lot of money here and this market is rewarding investors not traders generally. Obviously everything goes but investing is the best opportunity here.
Latha: Anything more to spot in the bank Nifty after the opening trade. You just have to pull up the bank Nifty, all the private sector banks are a bit under the weather losing steam and that is keeping the bank Nifty lower. HDFC Bank, ICICI Bank are all mildly red though PSU banks continue to be mildly in the green. Any fresh thoughts on the bank Nifty?
A: The ideal trade here is to buy PSU banks and the bank Nifty also is a buying opportunity. It is not that it is not. It is a very minor dip with a stop at 18,300. So, we would still be long.
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