Below is an edited transcript of Sudarshan Sukhani's interview to CNBC-TV18. Also watch the accompany video.
Q: Give us a sense of what sort of trade would you initiate on the Nifty if at all at these levels?
A: The idea was to get out of the long positions that we had taken yesterday and I had said don’t wait just get out. There are two ways of entering a Nifty trade. The first is to understand that the trade is still on the long side. We need to buy the Nifty because we are in a short-term uptrend. So, the better trade is for the Nifty to slide down, go for a dip towards 4,720 or close by thereabouts of that area then a long trade can be taken because I assume Nifty will make at least one more attempt to go towards 4,800, it may succeed or not.
So, there is some money to be made if the Nifty again moves towards 4,800 and we buy at 4,720 or in that area. There is a gap there that can be profitable. The second trade is for the Nifty not to come down at all, suddenly to reverse direction and cross 4,800. If that occurs then a breakout buying is possible. Within these two levels, I don’t think there is a Nifty trade.
Q: What if Nifty were to violate even 4,720 then this short-term uptrend gets violated? At what point would you lose faith in the short-term uptrend?
A: Yes, that’s the trader’s nightmare for today. What if I buy at 4,720 and the Nifty doesn’t care? That is exactly what is worrying me. The exit for the Nifty trade is much lower, somewhere around 4,640. So a 4,720 trade should be taken only when we get a sense that the Nifty is not falling. Wait for 15-20 minutes, buy 20 points higher and that is safer than to buy and then find that we have nothing to hold onto.
Q: Is there a clear short-term uptrend in Tata Motors ?
A: Yes, Tata Motors has a clear short-term uptrend. It’s a significant outperformer. It is now breaking out of the Rs 195 levels and that takes it all the way to Rs 205. This is a stock that we should be looking to buy on dips, whenever the market gives a sense of stability.
Q: The two stocks from the broader market that are showing a lot of momentum is PFC and REC. What is your call on both of these that always move in tandem?
A: Yes, they do, PFC in fact was a buying call in the morning and it has done its bit and moved up. PFC is also coming out of a trading range and it’s giving a sense that it’s probably looking at least in the short-term higher towards Rs 160 or so. So, there is some momentum left. REC does the same thing almost as PFC does but between the two PFCs charts for the short-term are slight better. Since we can take one of them PFC is the preferred instrument for now.
Q: Are you are still advising Tata Motors as a trading call or would you extend it to investors at all in which case can really Tata Motors be a buy when your overall call on the market is still bearish?
A: Yes, it can be. These are some of the questions that keep on coming and sometimes there are no clear answers, because if the market call remains bearish and it is and then we have isolated examples of strength like Tata Motors, like Infosys it becomes a slightly confusing scenario. However, within the understanding that a stock can turn around and go with the broad market, I can’t stop Tata Motors and Infosys from suddenly turning down. It is the understanding that the market takes that decision. Tata Motors is a distinct outperformer and it’s probably an investment buying opportunity. The wise approach would be to take some kind of a systematic investment methodology. So even if prices fall you get it at lower prices.
Q: I wanted to ask you also about Axis Bank . There is a marginal outperformance in the past few days or two days if you please. Does that convince you at all or is it still a no?
A: No, it’s a no-no. Two days is nothing and the outperformance for two days is not accompanied by any change of patterns, nothing at all. Sometimes we have 10 days of market consolidation like we saw in PFC and this is not outperformance. It’s just some random moment. It is one of the much weaker stocks in the banking sector.
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