In an interview to CNBC-TV18, Sahil Kapoor of Edelweiss RCM Research suggests a ‘buy’ on Reliance and L&T. Both the stocks look good and are expected to yield better returns. In case of Hero MotoCorp, Kapoor refers a stop loss of about Rs 1,770 with a target of Rs 1,420- 1,450.
Below is Sahil Kapoor's rationale for buying these stocks.
From Nifty components one stock that looks good from a bounce back perspective is Reliance. In the morning it had a very good level of about Rs 820. There is a good chance that it might try to go back to about Rs 870 levels. So, Rs 800 is a support for this stock and that is not breaking. Also, it is not making lower lows compare to what Nifty is doing. Although it is not outperforming the index to very large extent, it is still a better performer.
So from a bounce back perspective Reliance is a stock which you can look forward to and trade for targets of about Rs 870.
Larsen and Toubro (L&T) is one stock which is quite strong. Last time when the index corrected to the level of 5,680, L&T also came below Rs 1,400 level.
This time around the correction in L&T has been much shorter and volumes have been lower compared to the last time, the kind of volumes that we saw. So, L&T becomes a good bet from here. You can expect a 10 percent rise from here in L&T and target of about Rs 1,550 looks possible. Current level of Rs 1,420-1,430 is a good entry point and you could keep a stop loss at about Rs 1,380 and look for Rs 1,550 in L&T. So, it is a clear buy from here.
Hero MotoCorp is one stock whose chart looks terrible. It has broken down below very important level of Rs 1,700. So, as long as it trades below Rs 1,700-1,750 there is a good chance that this stock might fall to about Rs 1,420 levels. This stock has a good risk-reward ratio. If you could keep a stop loss of about Rs 1,770 you could look for targets below Rs 1,450 and look for targets of about Rs 1,420 on this counter. It is a clear head and shoulder formation on Hero MotoCorp. So, that should play out in the next few weeks or months.