Focus on midcaps, that’s where the action is: Gujral

Excerpts from CNBC-TV18's exclusive interview with Ashwani Gujral:

Q: How should one trade or approach trade this morning?

A: On the largecaps other than metals there isn't probably much to do. Yesterday Reliance broke out of Rs 2,900 and then came back within that range that indicates that Nifty will still remain choppy and between that 5,700-6,000 kind of range. So you need to stay away from trading the Nifty but meanwhile midcap action continues and those are the spaces that one needs to look at. Things like media or steel, which are doing well on the midcap side. So one should focus on the midcap plays and try to ride with fertilizer, power everything that is in the midcap category and moving up.

Q: What would you buy in the fertilizer space between Chambal Fertiliser Nagarjuna or RCF?

A: Chambal Fertiliser seems to be the favoured one; I think support comes in around Rs 67. The next level for these stocks is the three-digit level. Rs 102 is the target on Chambal. Nagarjuna also should move up to three digits in the coming future; around Rs 105 is the target for Nagarjuna.

With reference to Dish TV and WWIL , I think a more compelling theme out there is that they are two digit stocks and particularly on futures most of these things have 10,000-12,000 share lots. So anytime these things move Rs 5-6, a small trader stands to make a lakh in a day. So anything that is two-digit whether it is steel or media or power, it is all moving up. So that seems to be a more compelling theme these days as long as the Nifty remains ranged.

Q What are the charts of Videocon Industries and Videocon Appliances telling you?

A: Videocon Industries is looking like it is breaking out of a large range and the next target could really be around Rs 760-765 and that is happening on very huge volumes. So this sort of story about oil and gas may not be ending too soon and you may see one or two more circuits before it goes flat. We do not track Videocon Appliances closely.

Q: How is Ashok Leyland's chart looking to you?

A: If Ashok Leyland can maintain above this Rs 50-51 zone, I think the next level here could easily be around Rs 67 and one can keep a support here of about Rs 44-45. I think it is outperforming the auto sector and it is clearly headed for higher highs because this entire move is coming on very good volumes.

Q: Where does Educomp going from here ?

A: For Educomp next target is Rs 4,650-4,700, support could be around Rs 3,750-3,800. Those who are in this stock, I think it is in a bull market of its own and they should not be getting out of it. You will see consolidations but it will just keep on making new highs.

contd on pg 2..