Long-term traders should hold on to ICICI Bank: Technical Trends

A quick word on these two counters, JSW Steel and Lupin?

Sudarshan Sukhani: It seems to me that the market is not caring for good news or bad news, everything is being given the boot. Lupin actually has an excellent chart but that’s not helping. JSW’s brief rally is probably over and we are going to see lower levels. My own understanding seems to be that it is not just the results, the market is probably going through a process of revaluation benchmarking at a lower PE for most of the stocks, that’s going to be painful.

ICICI Bank, what would you do now?

Sudarshan Sukhani: The charts were suggesting that it is a good stock to accumulate but the whole market has literally fallen apart, so ICICI Bank would not remain aloof. At this point, my suggestion is if you are a trader and if you happen to have long positions in ICICI, which is fair because even I had them, then it is better to take those small losses, you are really losing 20 bucks on a futures contract, which is not much and step aside. Otherwise the next level of support is much lower at 920-930. I do not know if it will reach there but currently there is no other buying option.

It has been very volatile the last couple odd, three hours and we have gone down close to a 1%. What does one do now?

Sudarshan Sukhani: In fact the correct word is not ‘volatile’ because it has been almost completely one-sided, so it is a trend day. We opened at the top of the day’s range and since then we have been sliding down. This is not good news. Volatile movement would have been something like yesterday. We went up, went down, then tried to go up, go down but that’s not happening today. This is just one side, this is not good news because on the back of some volatility yesterday, we should have been stable today.

The bulls should have come out in full force but they do not have the full force it seems, so while it is true that we are trading at the 5650 levels, which has been consistently providing support. My own sense is that this support is going to give way now whether it happens today or three days later but today’s price action is bearish.