IT may outperform; buy Infosys, TCS, Wipro on dips: Sukhani

Sudarshan Sukhani, S2analytics.com in an interview to CNBC-TV18 gave technical reading for the market and stocks across various sectors.

Sukhani suggests that one could buy Wipro , TCS , Infosys and HCL Tech on an intraday dip. "Even the CNX IT index can be bought if one wants to go for the indices," he added. He expects the IT index to continue to outperform.

However, feels like telecom stocks like Bharti and Idea are both looking for lower levels,so there is no buy on dips trade.

From the banking space, Union Bank of India (UBI) and ICICI Bank are short selling ideas, said Sukhani.

Investors who prepared to wait for three-five years can find lot of opportunities in stocks like State Bank of India , Hindalco or Suzlon .

Below is the edited transcript of Sukhanis interview with CNBC-TV18. Also watch the accompanying video.

Q: Is there a trade for those who have no positions on the Nifty?

A: No, today there is no trade because in the morning also I had suggested that the markets are likely to be choppy. We havent had a significant rally. Suppose we rally 50 points from here that would be a trade on the short side because then one is selling in strength with some margin. But at current prices 5 points up or down I wouldnt venture any trade. In any case there is no buying at this point.

Q: IT names like HCL Tech, Wipro have been outperforming and may be in the past two weeks or so they have covered considerable amount of ground on the upside. Is there a trade over there on the long side?

A: Yes there is. In fact Wipro and TCS both these stocks were suggested for buying. I feel that even on an intraday dip it should be possible to buy Wipro, TCS, Infosys and HCL Tech. Any of the four or even the CNX IT index can be bought if one wants to go for the indices. So, that trade is on the long side, keep a small tight stop but it does appear that the IT index will continue to outperform.

Q: Telecom names Bharti and Idea have taken a hard fall in the past week or so. Is there still shorting opportunity over here, is this a buy on dips at all for a positional trader or for an investor?

A: Yes. The message is that the same things could happen to IT, I understand that. With a lot of regret there is no buying opportunity in Bharti. Bharti when it broke Rs 350 is suggesting a downside that could extend all the way down to Rs 300. So sometimes when I look at these charts and how they have changed, transformed from bullish to bearish I get worried that this is not the end of the decline. But Bharti and Idea are both looking for lower levels so there is no buy on dips trade here.

Q: Is there a long trade in any of the stocks that you track very closely. Is there something that you will start buying for the long hall at least?

A: There is no long trade in the active stocks that I am tracking because most of these stocks are blue chips, part of the Nifty and the Nifty itself is not giving us any long ideas at this point. One cannot have a trade on the long side when the broad market is collapsing like this. But if one is an investor then you have stocks like State Bank of India (SBI) or Hindalco and I own shares in Hindalco or may be even something far lower like Suzlon and if you are prepared to wait for 3-5 years there are lot of opportunities.

Q: Anything in the banking space because thats been ragging, the banking index per se is down close to about 1%. Do any of the banking names open up are okay for a short position at current levels and the Bank Nifty as well?

A: The Bank Nifty is a short. My target was 8,100 and much to my surprise we talked about it two days ago and it is reaching it faster than I thought. But Union Bank of India (UBI) and ICICI bank are both short selling ideas. In a choppy market like this it's always wise to wait for some kind of rally, however small and then go short but both of them have lower levels likely.

Disclosure: I have no personal holdings in the stock discussed.

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