Chance to initiate shorts at 5600 : Technical Trend
A relief rally is possible and you could still make money by selling at 5600 but this is only for professional traders.
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| 5600, if it is taken today before closing, what would that signal?
Sudarshan Sukhani: No, it has already signalled something. The market was in a trading range for the last seven days and we were bouncing off 5650. Today the Nifty has decisively broken that support whether we call it 5650 or 5630, it does not matter, that band has been broken decisively, it is as clear as possible, so 5600 is irrelevant. A trading range was developing and the market decided to go below the trading range, that tells us that the trading range was made midway in a decline and the technical calculations give us some horrifying downside targets. Broadly we are in a bear market probably and be very careful.
Does it pose an opportunity to perhaps short positions at 5600? Would you initiate fresh shorts here?
Sudarshan Sukhani: If you are a professional trader, you could buy puts, you could sell calls, you could also sell Nifty futures, February futures, keep a wide stop loss, a relief rally is possible and you could still make money by selling at 5600, this is only for professional traders but the answer for them is yes.
Would you short real estate?
Sudarshan Sukhani: Actually I would, I was also warned that after two days of back to back decline, this is may not be the good time to short it but real estate is a shorting opportunity. We will revisit those 2008 lows in real estate, not everywhere else but certainly in that sector.
What do you do with these stocks, an IVRCL, GMR Infra or a Lanco?
Sudarshan Sukhani: Since you are talking about people who are already holding these stocks, I am assuming they are investors, traders cannot hold such losses. For an investor, the last thing you want to do is to sell in panic, so you do not do anything. You wait patiently. This market has just begun its decline. We could see lower levels. We do not know but a strong possibility is there, so you just hold onto these stocks, do nothing with them, do not sell them now in anticipation of lower prices. The buying opportunities will come much later.
Sudarshan Sukhani: No, it has already signalled something. The market was in a trading range for the last seven days and we were bouncing off 5650. Today the Nifty has decisively broken that support whether we call it 5650 or 5630, it does not matter, that band has been broken decisively, it is as clear as possible, so 5600 is irrelevant. A trading range was developing and the market decided to go below the trading range, that tells us that the trading range was made midway in a decline and the technical calculations give us some horrifying downside targets. Broadly we are in a bear market probably and be very careful.
Does it pose an opportunity to perhaps short positions at 5600? Would you initiate fresh shorts here?
Sudarshan Sukhani: If you are a professional trader, you could buy puts, you could sell calls, you could also sell Nifty futures, February futures, keep a wide stop loss, a relief rally is possible and you could still make money by selling at 5600, this is only for professional traders but the answer for them is yes.
Would you short real estate?
Sudarshan Sukhani: Actually I would, I was also warned that after two days of back to back decline, this is may not be the good time to short it but real estate is a shorting opportunity. We will revisit those 2008 lows in real estate, not everywhere else but certainly in that sector.
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What do you do with these stocks, an IVRCL, GMR Infra or a Lanco?
Sudarshan Sukhani: Since you are talking about people who are already holding these stocks, I am assuming they are investors, traders cannot hold such losses. For an investor, the last thing you want to do is to sell in panic, so you do not do anything. You wait patiently. This market has just begun its decline. We could see lower levels. We do not know but a strong possibility is there, so you just hold onto these stocks, do nothing with them, do not sell them now in anticipation of lower prices. The buying opportunities will come much later.
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