SP Tulsian of sptulsian.com expects the March series to expire above 5700 levels. "For this series, 5600 Put indicates a strong support for the market. Renewed buying has started coupled with short covering. So, I am expecting market to remain positive," he said in an interview to CNBC-TV18.
Also read: Expect Nifty to be choppy next week: Sukhani
Below is the verbatim transcript of his interview to CNBC-TV18
Q: Where do you see this March series expire and what are the events that you would watch out for next week?
A: First thing what I liked about the next week is that in spite of a truncated week all three days are going to see trading in the March series. Heavy shorts are seen in the market. One can take the case of PSU banking, cement, automobile and more specially the two wheelers and the indications of some of them have been seen on Friday in the late trade probably is likely to continue.
We have seen the renewed buying coming back into the cement stocks as well. This is probably indicating that the renewed buying has started coupled with the short covering. So, I am expecting market to remain positive. I would not be surprised to see the expiry happening on 5700 plus, because there has been lot of hue and cry. People have been talking of 5500 levels and all sort of things.
However, the Put writing of 5600 indicates a strong support for the market at least for this series. So, whole of the next week is going to get traded in the March series, which is likely to be positive.
Q: Dish TV had quite a good run on Friday because of that hike in product prices. You are choosing to buy it for next week. What kind of a target price would you ascribe there?
A: This stock has been languishing in a range of Rs 60-66 or so for last two-three months. Since, they have posted their Q3 numbers, I see this as a big positive for the stock. The stock was seen more under accumulation in that price range.
Due to the 10 percent product increase and 38 cities hitting the second round of digitisation it will be seen quite positive. Thereafter once they sell or add those many set top boxes the revenues in the following quarters will start going up. So, I am taking a price target of Rs 78 in next about a month or so. Maybe one can expect that price to be seen by end of April series.
Q: What about you? If you had to give us two or three ideas to buy into next week what would they be?
A: I have chosen two stocks from the financial space. One is the PSU bank, Bank of India (BOI). If one really sees the expected Earnings Per Share (EPS) of Rs 50 and book value of Rs 360 by March 2013, so share is ruling at sub-Rs 6 PE multiple, price-to-book of 0.8. This stock looks to have been sitting on huge shorts. Short covering coupled with the renewed buying can make the stock to move up by about 5 percent in these next three days. I am giving an expectation of a 5 percent gain by expiry of the March series.
Second stock which looks is the Mahindra and Mahindra Financials. Again very strong pedigree and if you really see the financial performance it has all been very good. This stock also has corrected in these last two-three days and now ruling at sub-Rs 200. So, again one can expect to see a price of 5 percent gain in the next week which is again the truncated week of three days.
One midcap stock or maybe the smaller cap, non-F&O, non-trading stock I have chosen is the Heidelberg Cement. I am expecting the cement sector to have bottomed out and all the midsized cement companies have really taken a beating. So, Heidelberg seems to have bottomed out and maybe the value buying or the renewed buying interest maybe seen in this stock. If somebody can keep a view of about couple of months they can look for a gain of about 10 percent plus in this stock.