Indian market recovered today after a very poor performance last week. The market gained some strength today on an improved global risk sentiment and some buying in financial stocks such as top lender State Bank of India.
The BSE Sensex rose 199.02 points to close at 16416.84 while the Nifty ended at 4,985.65 gaining 65.25 points.
The gainers of the day are SBI (up 4.8%), ICICI Bank (up 2.6%), while Reliance Industries ended up 1.42%.
So, which stocks should you pick tomorrow to make most of the pullback?
Sudarshan Sukhani of s2analytics.com advises to wait for another 100 points rally as he feels the Nifty has energy to rally to almost 5100 now.
However, Ambareesh Baliga, COO, Way2Wealth believes that the pullback may take the market to 5050-5100 but won’t be able to sustain higher levels due to government’s policy inaction
"Till then in case rupee doesn't really depreciate like holds on at levels you’re global cues are positive then possibly the markets can hold in this region of 4800-5550, but I suppose clearly for it to cross these levels you require some bold decisions," Baliga adds.
Top picks and sells
Baliga feels all the OMC stocks that rallied on the hopes of diesel and LPG price hike will soon correct. As an investment strategy, he advises to buy OMC stocks only after next two to three days, which may give a return of 5-6% after diesel and LPG price hike.
However, he is not in favour of the biggest gainer of the day SBI. "Book out at least to a certain extent at the current levels because the way we see it is going beyond Rs 2100-Rs 2150 for SBI at this moment would be a bit difficult and although we have a longer term target of about Rs 2450. I suppose we will again see levels of about Rs 1950 before it moves to Rs 2450," he explains.
Other stocks that he recommends to buy are Voltas, Exide, United Phosphorus and Ceat which may outperform over the next 12-15 months, but may not see a major bounce back in the next 3-4 months, unless of course the markets go beyond that 5300-5400.
Meanwhile, Dilip Bhat Joint MD, Prabhudas Lilladher prefers buying SBI at current levels for a return of 10% in 5-6 months. He also recommends investing in Reliance Infra.