Mkt in uptrend; buy on dips: Sudarshan Sukhani

If the market does slid a 100 points then may be you should get out at break even.Sudarshan Sukhani

s2analytics.com

Technical analyst Sudarshan Sukhani suggested traders to keep stop loss at 5,200 if they are willing to take the risk and maintain their long positions.

"It is possible for traders to also move the stop loss to about 5,250, which will be the break even point," he said in an interview to CNBC-TV18.

Sukhani sees the market being in an uptrend, so one should wait for inevitable corrections and dips, which can be used to buy in, he added.

Below is the edited transcript of Sukhani’s interview with CNBC-TV18.

Q: I know it’s a no brainer to keep your long positions going in the market today but what kind of stop losses would you maintain?

A: I get worried when a trade becomes a no-brainer. In this case you have to be on the long side of the market, stop losses were at 5,200. Traders who are willing to take risks can simply keep that stop loss intact. But, it is possible for traders to also move the stop loss to about 5,250, which will be the break even point.

If the market does slid a 100 points then may be you should get out at break even. Although I am not doing it, but that movement of 50 points towards 5,250 is possible. The markets are in an uptrend, the idea should be -  we will have those inevitable corrections and dips, they will come. They should be used to buy in.

Q: You have long call on ICICI Bank .

A: ICICI Bank has been a favourite for some time now. We have been talking about buying it and saying that large private sector banks have the best charts. That still remains. Yesterday it made new highs for this uptrend which is a good sign.

The strength in the banking sector which we started seeing yesterday is going to be built upon. The banks will now probably outperform the Nifty. If that is so then ICICI Bank at current prices deserves buying.

Q: You have a buy on ACC for the day?

A: ACC represents the cement sector which has been outperforming for reasons which I don’t understand. But Ambuja has done extremely well and now ACC is doing the same thing that Ambuja has already done.

ACC is breaking out from a trading range. Yesterday it did breakout and made those new highs. Those new highs should be bought into especially when the entire sector seems to be gung-ho. It looks good.

So, for a day trader we will expect follow through for yesterday’s breakout. For a positional trader it is possible to buy calls or even futures in ACC and wait.

Q: Have chosen HCL Tech from IT?

A: It is one of the better performers in the four larger IT companies. It has moved up 10% which is okay. The bigger issue is that it has just crossed the Rs 520 threshold. Rs 500-520 was a very big resistance for HCL Tech. It wasn’t able to cross that. That it has done.

It also appears that the CNX IT is bottoming out at least in the short-term and there is a sense that apart from Wipro which is an underperformer, the other three stocks TCS , Infosys and HCL Tech would do well.

Today, HCL Tech’s breakout tells us that we will expect some follow-through. This market is following after a breakout. It doesn’t go back. We saw the Nifty breakout and then add 100 points. That should happen to most other stocks.

Q: From FMCG you have picked up Hindustan Unilever (HUL) for the day?

A: It has been a favourite. After a big gain on the back of news, in all fairness it had to, it is taking a period of rest. Yesterdays small narrow range bar on the back of big gains in the Nifty tells us that HUL is now willing and ready to participate in the rally again.

I would be a buyer in it. If it does breakout, there should be no hurry in exiting. It should go much more than we imagine.

Q: You have a sell on Pantaloon ?

A: Pantaloon has a very dismal chart. I don’t know what the results will bring but I wouldn’t buy it. If it actually rallies on the back of results, it probably becomes a short sell again. Yesterday it was falling. Apart from one big day, it has been consistently on the downside.

Pantaloon probably has much lower levels to come into. So, if after the results the markets don’t actually like it or just become indifferent that will be the perfect time to go short in it.

Q: Oil India is expected to announce a poor set of numbers. Would you choose to sell that today?

A: Yes and preferably after the numbers are given. I would say that this is a stock that is going down. All other oil marketing companies are doing the same thing. There is a pattern that’s broken down. You would expect much lower levels.

I think the Rs 465 target in Oil India is just modest for the day trader. We could really see it come down all the way to Rs 440-430. There are some very bad charts in the oil sector.

Q: If we do start flat, is it still prudent to stay on with your longs, expect consolidation and not be phased by it?

A: Yes, I would say it is prudent. We are going to see these dips and corrections and shake outs. But so far the momentum is very strong.

Q: What is your view on JP Associates now?

A: JP Associates is a buying opportunity. If there is a correction or a dip - that should be used to enter it. I think this stock is now moving up steadily and that should continue.

Q: What about Zee ? That has had a very good move in the last few days quietly?

A: Yes, it’s almost by stealth and now it’s looking at a target of Rs 175 so more upside there. It’s been consolidating for the last four-five days. So, it’s quite possible that it could now step out of the consolidation and give us that momentum.

Q: What’s your view on infrastructure names like NCC or IRB ?

A: IRB is absolutely out. It fell yesterday. Whatever rumours are you shouldn’t be buying it. It’s a short sell.

Nagarjuna Construction is the better stock. I think it’s trading in a range and willing to go up. So, that’s a buying opportunity.

Q: What about Jet Airways ?

A: Jet Airways is a buy for whatever reasons it keeps on going up. If the corrections are bought into market likes it. So, I would say search for an entry opportunity and go long.

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Sudarshan Sukhani bullish on Nifty, says time to go long

We saw Reliance move up yesterday and this is going to happen to a number of defense stocks.Sudarshan Sukhani

s2analytics.com

Technical analyst Sudarshan Sukhani of s2analytics.com is upbeat and bullish on indices since the Nifty has decisively broken a long trading range.

He suggests that this is not the time to short and one should go long. "Also look for intraday trades on long side," he added.

Below is the edited transcript of Sukhani’s interview with CNBC-TV18.

Q: What is your sense on index this morning?

A: My sense on the index remains upbeat and bullish. We had a decisive breakout from a long trading range and that is always to be respected. So the trade is to remain long, not necessarily getting out in a hurry. Also look for intraday trades on long side. This is not a time to go short.

Any day the market can go up and catch the short sellers by their neck, so the trade is almost very clear. We saw Reliance move up yesterday and this is going to happen to a number of defense stocks.

We cannot name them now because we do not know which one will pickup or be picked up and pushed on the upside. But, that is going to happen.

Q: What kind of targets do you see on Biocon ?

A: Biocon’s immediate intraday short-term target is Rs 260. Biocon, after a significant rally from Rs 200 reached Rs 260 and then consolidated. That consolidation should be resolved on the upside. Yesterday it saw big gains and that suggests that this is a consolidation and not a distribution.

In any case most stocks in this market are following the Nifty and if that is so then it’s not the immediate target. Once it crosses Rs 260-265 threshold then Biocon has the potential to add significant momentum on the upside. So, day trader should look for further gains today or build a position and maintain it.

Q: You would look for further gains in DLF after the 2% up move yesterday?

A: Yes, although I heard you say that DLF has been downgraded to Rs 165, at least in the short-term the charts are mimicking the Nifty. The Nifty has made a bullish pattern and broken out and DLF did the same.

So, I would be upbeat on DLF. I would look at Rs 225 and say it could go even higher. Once momentum builds in the market a lot of things are just brushed aside.

Q: What about Coal India ? Is that a weak looking chart to you?

A: Coal India should have been a good chart. It has made a distribution and it is not going up. Yesterday it should have gone up but it did not. It has already broken down from distribution. I have already explained that this is not a good time to go short.

So, the message here is that you short Coal India only if you want to create a hedge of some kind to your long positions or simply avoid it till it reaches Rs 320-325 where it would become an excellent buy again.

Q: You have a buy on Axis Bank for the day?

A: ICICI Bank and Axis Bank have been favourites. Now, I am adding HDFC Bank to that list. Axis Bank is on the verge of a breakout on the upside. The Bank Nifty has not done that. Bank Nifty was usually leading and we heard Udayan say that it’s not done it this time. But that doesn’t mean it cannot do it.

Axis Bank above Rs 1,060 then moves into un-chartered territory for this uptrend. I would be upbeat today. I am assuming that the banks will catch-up and also lead at least for the short-term period in the next few days.

Q: You think L&T is headed above Rs 1,400?

A: I think so. It made a narrow range yesterday. It did not participated in as much of the Nifty rally as it could have but that should change. In any case if the Nifty suggesting signs of bullishness then a lot of the heavyweights will eventually do their breakouts, do their momentum driven upswings.

L&T is well suited for that. Now at this point L&T is a better buy for short-term traders than BHEL.

Q: You have a sell on HPCL ?

A: The oil marketing companies do their own thing. I sometimes have confusion about what is going on and whether they have any relationship with the broad market and it doesn’t appear that they have. This is a short sell even today which means its one of the rare short sells in a rising market.

The charts of HCPL, BPCL and IOC have broken down from their tops. There is an intermediate decline that they are going into and we should be able to sell it.

Q: How would you trade Wockhardt today?

A: One can still trade it and go long in it but not necessarily today but whenever one see some kind of a consolidation. These stocks are telling that they are not stopping at this level. They are likely to go much higher. So, the trade is on the long side but avoid it for the day.

Q: You track Bombay Dyeing closely?

A: Bombay Dyeing has completed its correction. That correction has led to big gains yesterday. Once a pattern is seen of higher highs-higher lows which is what Bombay Dyeing has done then one can assume that it’s in a bull market of its own.

So, the trade here is to buy - rather than go for day trade in Bombay Dyeing. People who want to take positions for few weeks would be much better rewarded.

Q: What about Balrampur Chini from the sugar space?

A: The trade is still to go up. We have been upbeat on sugar since last week and that’s paying off. Even now on any dip, consolidations buy Balrampur Chini and Shree Renuka Sugar .

Q: What kind of targets would you have on Reliance Industries ?

A: Reliance target is about Rs 850. That is quite good because that means there is much more headroom still left here.

Q: You expect more traction in Sun TV ?

A: It does appear so, although it’s not a favourite. So, given the choice I would not buy Sun TV. But on the charts it shows that there is probably more traction.

Q: Would you buy Reliance Capital ?

A: I would. Reliance Capital seems to have made its bear market low around Rs 270-280 levels. Now this stock is likely to move up. It is going to be choppy, the first initial leg is always difficult but I would be a buyer in Reliance Capital.

Q: As a strategy would you advice naked long position in the market now or do you think some protection is prudent at this level?

A: Futures position is what you are refereeing to is good enough or deep in the money call, which is what I have is like a Futures position with some minor inbuilt protection, that is also as good.

I would advise people to go headlong in the long positions rather than try to hedge. This market would go 200-300 points higher. There is no sense in trying to hedge and reduce your gains.

Q: Where would you keep a stop loss on that long trade?

A: That is still 5,200. That is now an important level. If the Nifty were to slide below that I would say the charts are wrong or my interpretation is wrong.

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Nifty to end above 5250, take long positions: Sukhani

The trade is that at 5,250 a close above that tells us that this market momentum has turned to up. A close below 5,200 would have told us the opposite. Sudarshan Sukhani

s2analytics.com

Technical analyst Sudarshan Sukhani of s2analytics.com expects Nifty to close above 5,250 today, so he suggests taking some long positions from the start of trade today.

Nifty's close above this level would be indicative of a bullish pattern and an upside trend, he added.

Below is the edited transcript of Sukhani’s interview with CNBC-TV18.

Q: What's the outlook on the Nifty this morning?

A: The outlook was a little muddied last week when we said that you buy calls and buy puts, the market could go anywhere. The important point was that it will go somewhere. If somebody has followed that advice and taken only intraday trades in the direction then today we should be owning some calls and some puts, which are likely to lose value.

But the trade is that at 5,250 a close above that tells us that this market momentum has turned to up. A close below 5,200 would have told us the opposite. That below close hasn’t happened. Chances are that we might well close above 5,250 today. If that happens then we should be long. The trend is then on the upside. It will also confirm a mildly bullish pattern.

So, we have to take this a day at a time. Since we have to go with the trend, the trend is expected to change to up today on a close above 5,250. Some long positions should be taken from the start of the day.

Q: Does chart of Divis Labs also look good?

A: The charts look fantastic. Divi’s Lab has been making new highs and then consistently doing it, not just going up and then eventually retracing. So, here is a chart and here is a stock that says ‘I am willing to go up and the market is willing to support that rally.’

There is a lot more buying here. Today, there will be a gap open of some kind. But then on intraday dips, on intraday rests it is a buying opportunity. It is not likely to stop where it opens.

Q: Which stock would you buy from the banking space?

A: I have been favouring ICICI Bank and in all fairness it has rallied the best in the large cap banks. That remains a favourite. On Friday it closed lower. The chances are that that was some kind of a correction that’s coming to an end. Today it should close higher, open higher.

At the open after the first cooling off period of 15-20 minutes or later in the day, the stock becomes a buying opportunity. The chances are that it will cross Rs 1,000 and go up. If the Nifty moves up, ICICI will outperform.

Q: What about Bata ? Do you think the pull back post result is over?

A: Bata made those new highs which it has been doing on Friday. That was when the markets were a little confused. Those new highs also confirmed a bullish pattern, some kind of a continuation of the uptrend and that gives a target of Rs 1,050 now. That’s fairly ambitious, that’s 15% up. But Bata has been doing the right things. Bata is now still on a roll and there is much more upside.

Q: You have a buy on Jain Irrigation this morning?

A: If this market is going up and it could well be, so we are just following the momentum. If it doesn’t go up we’ll have to suffer that setback. But if it is going up then midcap stocks are going to go with it and certainly probably outperform.

Jain Irrigation has completed its bear market. It made a double bottom, rallied, then it went through a very sever and sharp correction after the rally. That’s good news because we can buy it lower.

So, around Rs 75 where it stands now, Jain Irrigation has completed a correction and it is probably going to resume its uptrend. This could be a significant up move. So it is not just a day trade. If the trade goes in our favour, we should carry it on.

Q: You have a sell on Reliance Power ?

A: It is a miserable chart. It shows nothing. It keeps on rallying, the rallies are small, they are very intermittent. Even in terms of time the rallies are not sustained and keep on falling.

The reason why I still have sell is that assuming that the market will open up, there will be some opportunities of selling in that strength and Reliance Power is almost the perfect opportunity.

So, once the stock stalls, it is possible to take a short position even as the broad market goes up.

Q: You also have a sell on BPCL ?

A: That’s a very disappointing chart. It had a straight line decline, didn’t stop at all. And now after that decline it is on the verge of a major breakdown on the downside.

Whether that happens or not, the trade again is that if there is a gap up, if there is some strength in the stock, that strength should be used to go short in it.

Q: What would you do with Shree Renuka now?

A: Shree Renuka is a buy. It has been referred to as a buying opportunity earlier also and that holds. So, there are modest smaller short-term targets of Rs 35-36 and an eventual target of Rs 40. That applies to most sugar stocks.

Q: What is the chart of Glenmark telling you?

A: Glenmark is telling us that the bear market in the stock is over. It is now moving up. It has been moving up consistently and it is almost doubled itself. At current levels there is again a buying opportunity. There was a big move on Friday, it is probably a continuation. So, we should expect higher levels to come. Buy on any intraday dip.

Q: What about Dishman Pharma ?

A: Surprisingly Dishman Pharma is also in the same league as Glenmark. Apparently the bear markets in a lot of these midcap pharma companies is done with, it has been making higher highs, higher lows, made a very big gain on Friday. Those gains are going to be built upon.

It does appear that the Nifty is going to close above 5250 for all we know. If that happens, a lot of stocks will move up.

Q: How is the chart of REC ? That looked weak on Friday?

A: Yes it did but I would assume that this is a minor correction in an ongoing uptrend. REC has a very decent chart as does PFC . So Friday’s correction should be bought into. Here is a stock that’s actually corrected. I wouldn’t worry about that dip.

Both these stocks are likely to move up. REC has a very immediate target of Rs 205-210. But eventually I think it will go back to its Rs 250 levels.

Q: Would you buy Marico on dips?

A: No I would not. Marico has seen a very decent rally. At some point Marico becomes a buying opportunity. Fortunately we can't short sell it. I say fortunately because that would be an unwise act. We wait patiently.

Marico for somebody who is a short-term trader is a sell. It should slide further till it finds support somewhere around Rs 180.

Q: How would you approach the opening at 5260? Would you open up a fresh long here?

A: Yes, I would open up a fresh long looking at a target of 5400 and a stop loss at 5200.

Q: What do you think of Mahindra Satyam ?

A: The charts are saying it is going up. So, that’s fine. But I wouldn’t trade in it. There are so many other midcaps available which are more attractive in the IT sector.

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Nifty to end above 5250, take long positions: Sukhani

The trade is that at 5,250 a close above that tells us that this market momentum has turned to up. A close below 5,200 would have told us the opposite. Sudarshan Sukhani

s2analytics.com

Technical analyst Sudarshan Sukhani of s2analytics.com expects Nifty to close above 5,250 today, so he suggests taking some long positions from the start of trade today.

Nifty's close above this level would be indicative of a bullish pattern and an upside trend, he added.

Below is the edited transcript of Sukhani’s interview with CNBC-TV18.

Q: What's the outlook on the Nifty this morning?

A: The outlook was a little muddied last week when we said that you buy calls and buy puts, the market could go anywhere. The important point was that it will go somewhere. If somebody has followed that advice and taken only intraday trades in the direction then today we should be owning some calls and some puts, which are likely to lose value.

But the trade is that at 5,250 a close above that tells us that this market momentum has turned to up. A close below 5,200 would have told us the opposite. That below close hasn’t happened. Chances are that we might well close above 5,250 today. If that happens then we should be long. The trend is then on the upside. It will also confirm a mildly bullish pattern.

So, we have to take this a day at a time. Since we have to go with the trend, the trend is expected to change to up today on a close above 5,250. Some long positions should be taken from the start of the day.

Q: Does chart of Divis Labs also look good?

A: The charts look fantastic. Divi’s Lab has been making new highs and then consistently doing it, not just going up and then eventually retracing. So, here is a chart and here is a stock that says ‘I am willing to go up and the market is willing to support that rally.’

There is a lot more buying here. Today, there will be a gap open of some kind. But then on intraday dips, on intraday rests it is a buying opportunity. It is not likely to stop where it opens.

Q: Which stock would you buy from the banking space?

A: I have been favouring ICICI Bank and in all fairness it has rallied the best in the large cap banks. That remains a favourite. On Friday it closed lower. The chances are that that was some kind of a correction that’s coming to an end. Today it should close higher, open higher.

At the open after the first cooling off period of 15-20 minutes or later in the day, the stock becomes a buying opportunity. The chances are that it will cross Rs 1,000 and go up. If the Nifty moves up, ICICI will outperform.

Q: What about Bata ? Do you think the pull back post result is over?

A: Bata made those new highs which it has been doing on Friday. That was when the markets were a little confused. Those new highs also confirmed a bullish pattern, some kind of a continuation of the uptrend and that gives a target of Rs 1,050 now. That’s fairly ambitious, that’s 15% up. But Bata has been doing the right things. Bata is now still on a roll and there is much more upside.

Q: You have a buy on Jain Irrigation this morning?

A: If this market is going up and it could well be, so we are just following the momentum. If it doesn’t go up we’ll have to suffer that setback. But if it is going up then midcap stocks are going to go with it and certainly probably outperform.

Jain Irrigation has completed its bear market. It made a double bottom, rallied, then it went through a very sever and sharp correction after the rally. That’s good news because we can buy it lower.

So, around Rs 75 where it stands now, Jain Irrigation has completed a correction and it is probably going to resume its uptrend. This could be a significant up move. So it is not just a day trade. If the trade goes in our favour, we should carry it on.

Q: You have a sell on Reliance Power ?

A: It is a miserable chart. It shows nothing. It keeps on rallying, the rallies are small, they are very intermittent. Even in terms of time the rallies are not sustained and keep on falling.

The reason why I still have sell is that assuming that the market will open up, there will be some opportunities of selling in that strength and Reliance Power is almost the perfect opportunity.

So, once the stock stalls, it is possible to take a short position even as the broad market goes up.

Q: You also have a sell on BPCL ?

A: That’s a very disappointing chart. It had a straight line decline, didn’t stop at all. And now after that decline it is on the verge of a major breakdown on the downside.

Whether that happens or not, the trade again is that if there is a gap up, if there is some strength in the stock, that strength should be used to go short in it.

Q: What would you do with Shree Renuka now?

A: Shree Renuka is a buy. It has been referred to as a buying opportunity earlier also and that holds. So, there are modest smaller short-term targets of Rs 35-36 and an eventual target of Rs 40. That applies to most sugar stocks.

Q: What is the chart of Glenmark telling you?

A: Glenmark is telling us that the bear market in the stock is over. It is now moving up. It has been moving up consistently and it is almost doubled itself. At current levels there is again a buying opportunity. There was a big move on Friday, it is probably a continuation. So, we should expect higher levels to come. Buy on any intraday dip.

Q: What about Dishman Pharma ?

A: Surprisingly Dishman Pharma is also in the same league as Glenmark. Apparently the bear markets in a lot of these midcap pharma companies is done with, it has been making higher highs, higher lows, made a very big gain on Friday. Those gains are going to be built upon.

It does appear that the Nifty is going to close above 5250 for all we know. If that happens, a lot of stocks will move up.

Q: How is the chart of REC ? That looked weak on Friday?

A: Yes it did but I would assume that this is a minor correction in an ongoing uptrend. REC has a very decent chart as does PFC . So Friday’s correction should be bought into. Here is a stock that’s actually corrected. I wouldn’t worry about that dip.

Both these stocks are likely to move up. REC has a very immediate target of Rs 205-210. But eventually I think it will go back to its Rs 250 levels.

Q: Would you buy Marico on dips?

A: No I would not. Marico has seen a very decent rally. At some point Marico becomes a buying opportunity. Fortunately we can't short sell it. I say fortunately because that would be an unwise act. We wait patiently.

Marico for somebody who is a short-term trader is a sell. It should slide further till it finds support somewhere around Rs 180.

Q: How would you approach the opening at 5260? Would you open up a fresh long here?

A: Yes, I would open up a fresh long looking at a target of 5400 and a stop loss at 5200.

Q: What do you think of Mahindra Satyam ?

A: The charts are saying it is going up. So, that’s fine. But I wouldn’t trade in it. There are so many other midcaps available which are more attractive in the IT sector.

View the original article here