Valiant investors can ride the current rally in benchmark indices aggressively by trading in high beta (high risk) stocks like realty, metals, experts said. But the cautious ones should stick to quality stocks which are fundamentally strong.
“If one wants to trade this rally very aggressively then one can look at high beta names, realty and metals being the prime two examples because this is one stock rally which has not seen participation from the high beta sectors yet,” Gautam Sinha Roy, Motilal Oswal told CNBC-TV18 today.
Although realty stocks have gained in past two sessions along with other rate sensitive sectors, they still have scope for rallying after being hammered in early April. BSE Realty index have remained almost rangebound in past one month. Today, BSE Realty index today gained 1.8 percent to end at 1991.75, which is far from highs achieved in February and March. On the other hand BSE Metal index has been steadily declining since January. Today BSE Metal index ended flat at 8822.88.
Among realty sector, Kunal Bothra of LKP is bullish on Indiabulls Real Estate. “If we look at the charts, today also the real estate pack is showing a bit of traction over here. It was bit of missing for the last couple of days. DLF, Unitech, Indiabulls Real Estate, remained more or less in a range."
He expects Indiabulls to cross Rs 90 levels and has a target of Rs 92-93. “Stop loss has to be maintained at Rs 82 levels on Indiabulls," Bothra said.
Cautious or long terms investors however are cautioned to stay invested in good quality sectors and selectively book profits. Sudarshan Sukhani of s2analytics.com also advises to maintain long positions in the current bull market. In a short term he expects markets to trade in range after a mild correction. He is however confident that market may not see sharp correction of 120-130 point again very soon.
Indian Indices ended flat today after trading at their highest levels in nearly two-and-a-half years. Shares of rate sensitive sectors like banks, realty, auto, capital goods continued to see buying in trade.
Lower wholesale and consumer price index have fueled market’s hope for rate cut by Reserve Bank of India sooner than expected. High liquidity in global markets and falling commodity prices have also helped investor sentiments.
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Bajaj Auto which today reported 1 percent on year decline in fourth quarter net profit is offering good buy opportunity, expert said. Both Sukhani and SP Tulsian of sptulsian.com were of the opinion that Bajaj Auto could be bought below Rs 1800.
“Hero Moto and Bajaj Auto always I found that you have a lot of investment based theme on both the stocks and whenever the stocks correct after may be dull numbers which has been the case for Q4 also here, that gives a very good entry point for both of these stocks,” Tulsian said.
Among mid caps Tulsian preferred Jaypee Infra due to its strong land development projects. He reasons that the companies’ projects includingYamuna Expressway will help to reduce its debts. “Even if you take the earning point of view may be they are posting an earnings per share (EPS) of close to about Rs 10. So, there is no justification for giving a PE multiple of 4. So, I have been always holding positive view, but for some reason the stock has not been moving up,” he explained.