In an interview with CNBC-TV18's Anuj Singhal and Sonia Shenoy, Sudarshan Sukhani of s2analytics feels a deeper correction is in the offing. However, he feels investors should wait until market gives some more signs that it is not going up.
Earlier, one would have predicted that the correction would be lead by the private sector names but the PSUs seem to have taken a lead, adds Sukhani.
Meanwhile, market expert Deven Choksey sees resistance for the Nifty at 8050 levels.
Below is the verbatim transcript of Sudarshan Sukhani's interview:
Q: Do you get a sense that the market might be now nearing a decent correction and by decent I mean 5-6 percent correction because so far we haven't even had that?
A: I do get a sense, my worry is something else. This market deceives us repeatedly; how its doing this one day here, one day there sort of cameo act. So, while the correction sense is correct and I am agreeing with you; I get the sense that a deeper correction is in the offing. It doesn't necessarily mean that it has started. We could have one or even two false rallies on the upside and that would kill traders. So, take it easy, let the markets gives us a little more sort of feeling that its not going up.
Q: If we do see this slide on the index or correction do you think it could be led by many of the PSU banking names?
A: I always thought it will be led by the private sector names but today the PSUs have taken a lead. It will certainly be lead by the banks, maybe a mix of both. I would stay away from this market tomorrow because tomorrow could be a very unusual day.
Q: Jindal Steel is news driven and we have seen the kind of impact on the stock price but technical charts indicating any kind of support level or is this a falling knife?
A: It is a falling knife. It is nothing; there is no support. Support will come in Hindalco which has done surprisingly well as compared to what our expectation was. If at all among the metals, the first support will come in Hindalco . It is not visible but that is something that we are watching for.
Q: Today Coal India is up about 5 percent but that's because of the newsflow that has just past but technically how does that one look, this month has not been good for Coal India at all?
A: No, it has not been; that is okay. Any stock that goes up then comes into a correction but Coal India is one of the few stocks that need to be bought at current levels. If you are serious about this bull market than Coal India is going to be a leader; it's not part of any sector, like Reliance Industries it's independent. However, Coal India is certainly going to be an outperformer. So, these dips are sort of god given for buying; they are not for worries.
Q: You did say that you want short the market today. Maybe you will look for shorting opportunities tomorrow. From October point of view what would be the Nifty levels that you will watching out for?
A: Well we are watching at 8,050 at resistance and if tomorrow the markets don't react or don't actually come back to that level then I would assume that-that resistance is a stop loss as well as a barrier for further rallies and it will be a sell on rallies or sell at every opportunity market.
So beyond that level on the down side it's not easy to say where the markets will stop and in what form any decline could come. It could be a choppy decline, falls then big rallies then decline and then view would then be simply to hold on to your short positions; that will come tomorrow.
Q: Your view on Hindustan Unilever Limited (HUL), of course there is this defensive play that's also working in its favour but purely for the shorter term would you trade it on the long side?
A: I would trade Hindustan Unilever Limited (HUL) on long side for shorter term. Now the problem is that it is already rallied for two days. Even then if there is a pause for the next 2-3 days there is more here on the upside. So I would be willing to buy on any pause. My targets for this were Rs 1,000 but given the fact how targets are being exceeded so quickly and rapidly it could easily become more.
Q: Has Arvind corrected enough or would you wait for more correction?
A: I will wait for more correction because the market itself is giving a sense of unease. So, it is better to wait.
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