Market may become 'untradable'; buy on deep dips: Sukhani

Written By Unknown on Senin, 11 Maret 2013 | 10.54

Technical analyst, Sudarshan Sukhani, s2analytics.com believes the market is near a very strong resistance zone, however adds that does not mean the index will stop here. He says chances are that it will become very choppy and essentially untradeable.

"One will have to buy on deep dips and that is the trend. The short-term trend is up but till the markets do not consolidate, the easy money has gone out of the trend," he said in an interview to CNBC-TV18.
 
Below is the verbatim transcript of Sukhani's interview with CNBC-TV18.

Q: How you are trading the index at 5,900 plus zone?

A: We have had a very good run on the index, caught it at the lows and my suggestion was to exit all short-term positions on Friday afternoon. So, I would assume that traders should now be out or they should plan to get out of the long positions. We are entering a very strong resistance zone that does not mean the index will stop here. The chances are that it will become very choppy and essentially untradeable. One will have to buy on deep dips and that is the trend. The short-term trend is up but till the markets do not consolidate, the easy money has gone out of the trend.

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Q: You are long on names that are recovering like Jaiprakash Associates ?

A: Yes and that is a surprise after seeing JP Associates and selling it and going short in it. For the last three weeks JP Associates has been making a small base, I like stocks that give us base breakouts. The building of a base tells us that the selling has stopped that has happened in JP Associates. This could probably be short-term; I am assuming it is because even the Nifty I assume will eventually face resistance. However, for the time being JP Associates is a buying opportunity, a breakout from the small narrow base tells us there is more upside here, momentum stocks should be bought into. We have been upbeat on midcaps for the last seven days that sense continues.

Q: No recovery visible in Voltas ?

A: No recovery because Voltas is just going one way, sliding down, a two day small rally that gives the impression of a small bearish flag rather than a base and then a breakdown from that, that is a pity. Some of these big favourite capital goods names like Voltas, Crompton Greaves are suggesting that much lower levels are coming.

Current mkt rally may push Nifty to 6100: Amisha Vora

Disclosure: I have no holdings in the stocks discussed.



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