It is a relief that the market has started to trade in a band after days of moving with a lack of direction, technical expert Sudarshan Sukhani of s2analytics.com told CNBC-TV18. Shardul Kulkarni of Angel Broking concurs and advises investors to avoid the mid-caps and focus on ICICI Bank in the large-caps.
Meanwhile, SP Tulsian of sptulsian.com says that two-wheelers, cement and PSU banks contributed to the Nifty's fall by correcting much more than expected.
Below is an edited transcript of the experts' analysis on CNBC-TV18.
Key indices fell sixth day in a row on Friday, shedding roughly 4 percent on a week-on-week. The mood in global markets has become edgy after the developments in Cyprus earlier this week, and back home foreign fund flows have slowed down considerably this month. The Sensex closed at 18735.60, down 57 points over the previous close, and the Nifty shed 7 points to close at 5651.
The three sectors that contributed to the Nifty are two-wheelers, cement and PSU banks and all three sectors corrected much more than expected led by Hero Motocorp, Bajaj Auto in the auto sector; ACC and Ambuja in the cement sector. PSU banks Punjab National Bank (PNB), Bank of India (BOI) and Bank of Baroda (BOB) took a big hit before seeing a considerable short covering if not renewed or fresh buying interest, says SP Tulsian of sptulsian.com.
Sudarshan Sukhani of s2analytics.com says that it is a relief that that the market has stated to trade in a band after days of moving with a lack of direction. "If the market holds at 5,650, then there is a trade. It is possible that this might be the start of a relief rally but the trade is worth taking a risk. If the Nifty closes below 5,640, it will become clear that there is no relief rally. So I am long in the Nifty."
Shardul Kulkarni of Angel Broking advises investors to avoid the mid-cap segment and look at ICICI Bank in the large cap space. "Investors could buy a few call options if the stock moves below Rs 1,000."
Tulsian is also positive on SKS Micro after the management announced that it hoped to resume operations in Andhra Pradesh within a week. On the National Hydroelectric Power Corporation (NHPC), the market experts adds that the margin call pressure on the stock, on news of a few Ahmedabad-based brokers adopting long positions on the stock. "With the absence of that pressure, investors could take a range of Rs 18-21 over the next month or so."
The market expert is also positive on Manappuram General Finance due to the limited downside. With a horizon of six months, Tulsian expects the stock to move to levels over Rs 30. "There is little to expect from the earnings of Bharat Heavy Electricals Limited (BHEL) until there is adequate reform in the power sector, ” he says.
On the Metals and Minerals Trading Corporation (MMTC) OFS, the market expert maintains level of Rs 175. On the two stocks at 52-week lows - Voltas and Ballarpur Industries Limited (BILT)- Tulsian adds he is not positive on BILT. He favours Voltas and says that the stock might have bottomed out. "It seems to have found strong support at Rs 72-73 and offers opportunities for short-term investors or positional traders in the April series."