See downside target of 5500; avoid taking shorts: Sukhani

Railway Budget will be presented today and the Union Budget 2013 is just around the corner, which can cause cause temporary aberration in the downtrend.

The more the market falls before the Budget, stronger are the chances of a sharp volatile upmove coming into the picture, Sukhani told CNBC-TV18.

"So, short-term trader should avoid taking short position. Have positional shorts, maintain them and let the market go wherever it wants. However, on an intraday short-term basis till the Budget, the bias should be on the long side," he added.

Below is the verbatim transcript of Sukhani's interview with CNBC-TV18

Q: Difficult global day, what kind of Nifty position would you take in today?

A: It is a difficult global day. However, I would say that the pieces of the jigsaw puzzle are coming together. We have been bearish on the market suggesting that a downside target of 5,500 is visible. That works out but the problem for Indian traders is the big news event and this news event can cause a temporary aberration in the downtrend. That is very likely. The more the market fall before the Budget the stronger the chances of a sharp volatile upmove come into the picture.

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So, for the short-term trader, taking a short position is not a good idea. You have positional shorts, maintain them and let the market go wherever it wants. However, on an intraday short-term basis till the Budget the bias should be on the long side.    
 
Q: You have buy call on Ranbaxy Laboratories , which did well yesterday?

A: Yes. That is a buy on dips or rather it is a falling knife trade. It did well yesterday. It was flat for the last two days but it was been falling much before that. The chart suggests that the stock is deeply oversold. If not anything, will get a relief rally, if there is something more the positional traders will benefit. However, for today Ranbaxy easily see follow-through of yesterday’s gains. So, it makes sense to buy it and better if one get it little lower in the morning.

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Q: You think the rally in some of the oil marketing companies is done with?

A: It is done with. They are making intermediate tops so it is not just a short-term trade. Both Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) are suggesting that the trend is over for the time being, they are looking at lower levels, of course that will eventually work out and then revert back to an uptrend. That is in the future. As of now lower levels are coming. These are short selling ideas and they should be short sold.

Disclosure: I have no holdings in the stocks discussed.