IT, pharma likely to outperform: Manghnani

Anil Manghnani of Modern Shares & Stock Brokers is of the view that from a longer-term point of view IT and pharma will outperform the market.

Manghnani told CNBC-TV18, "Both pharma and IT clearly have outperformed in the last six-months. From a longer-term point of view, if you are looking six-months to a year down, they will still outperform the market. But if you are just positioning yourself for the short-term pullback rally or a short covering rally, I don’t think there are too many shorts in these two sectors. So we maybe in a short covering rally, they might not outperform. Sure they are benefiting from the weakening rupee but just from the short-term, I think they may not be the outperformer. You have beaten down capital goods and banking might give you sharper returns or sharper trading bounces."

He further added, "From a long-term point of view, I think they are still safer. I am going for Cipla, which we have recommended a few times before. This stock doesn’t collapse with the rest of the market. It is doing a move similar to what Ranbaxy did where it bottomed at Rs 300 and over a period of time maybe two-three has doubled to Rs 600, I think Cipla is in that transition phase where Rs 160 seems to be a terminal bottom hit in January and an upside target maybe sometime when the bull market resumes of Rs 320. But in the shorter-term Rs 206 to Rs 186, at Rs 20 range, is an investment range not a trading range for me, buy the stock in this range, short-term target Rs 220-244. If you are playing for a Ranbaxy move over a longer-term maybe even Rs 320 a doubling from Rs 160 lows in January to somewhere Rs 320 maybe next year sometime."