The bulls rode the global wave to post a strong rally. Easing crude prices also boosted sentiment. Nifty closed at 3,947 up 131 points, while the Sensex shut shop at 13,112 up 536 points.

“We could sustain after such a strong gap opening. Volumes have been slightly above average. It is nothing to call it star-studded volume. But it is much better than a lot of the falls that we saw. There could be some strength coming in. Traders should use 4,000 as a trend decider level on the Nifty spot. We may see a run up to about 4,100. One should definitely start considering looking at the capital goods sector and the banking sector. These are the ones where we feel one could have a sudden short-term momentum coming in on the upside. If we can sustain at least in a neutral territory and not really get negative, we have almost 80% chance of getting back into positive gear,” said Rahul Mohindar.

Rahul Mohindar of viratechindia.com is positive on SBI, Axis Bank and Union Bank.

Here’s how Rahul Mohindar views the stocks on board:

On Polaris:

The level between Rs 65-75 has been a very good support. That is why you are seeing that kind of a bounceback. But I would not read too much into this kind of a bounceback. I personally don’t think that IT is really going to have favour in the next couple of days. So, I would avoid Polaris. If one were long in it, I would exit it.

On Tata Steel, Hindalco:

Tata Steel, Nalco and Hindalco still look negative. We are possibly approaching supports at the same time. So, maybe another 4-5% is in store. But one should not play on the positive side of the metals space at all.

On SBI, Axis Bank:

It is very important to be selective here because you have got a fairly wide choice here. I would look at going at State Bank of India (SBI), Axis Bank and Union Bank. These are three banking stocks that seem to be showing some kind of a consolidation formation.

The next 3-4 days remain very critical on the sustainability factor of these stocks. But broadly these are three stocks, from a medium-term to long-term perspective, where I would start nibbling into buying.

Disclosures:

It is safe to assume that my clients and I may have an investment interest in the stocks or sectors discussed.

Vikas Sethi, MD, Sethi Finmart is positive on Aban Offshore and Voltas.

Here’s how Vikas Sethi views the Stocks on board:

On Aban Offshore:

The stock has corrected by more than 50% from its peak of Rs 5,500 to the current levels of Rs 2,600. This company is the best play to capitalize on the strong demand of offshore rigs and the continued uptrend in the day rates.

Due to the spiraling crude prices, the company is expected to be the major beneficiary of the continued uptrend for the day rates of deep-water assets.

More than 35% of its turnover in FY09 is expected to be derived from the deep-water segment. Valuationwise, after the recent sharp meltdown, the stock is currently available at a multiple of 7 times expected earnings FY09 of Rs 375 and 5 times expected earnings of FY10 of around Rs 525. My target for the stock would be Rs 4,500 in about 12 months.

On Voltas: 

This stock has seen a correction from its significant levels of Rs 260 to the current levels of Rs 120. This company has of late transformed itself from being a low margin consumer appliance company to a niche engineering player undertaking various electromechanical projects and services.

The company has a very strong order book. At the current market price, it is available at 15 times FY09 earnings and around 11 times FY10 earnings. I expect the stock to be trading at around Rs 225 in a year’s time from the current levels of Rs 120.

Disclosures:

I personally hold these stocks and have recommended them to the clients.