In an interview to CNBC-TV18, Sudarshan Sukhani of s2analytics.com, SP Tulsian of sptulsian.com and VK Sharma, HDFC Securities give top pick for the day.
Sudarshan Sukhani, s2analytics.com
Market is weak and midcap stocks are really taking the brunt that usually happens. With poor market breadth I think there are a lot of opportunities to go short. We are looking to go and sell Housing Development Infrastructure Ltd (HDIL). After that big news event HDIL had a large decline and then a consolidation that has lasted for four-five days.
After that consolidation the original downtrend has resumed, so the sense is that HDIL will see much lower levels before it stops falling and starts any kind of base building. So HDIL is a short selling idea for today.
Our focus on buying is mainly on blue-chips. Most other midcap stocks should be avoided. But when we do locate a blue-chip it is worth going long in it and for today I would suggest considering Divis Laboratories.
Divis Lab had a big decline that was a correction. That correction finally led to a small base building exercise and a more or less confirmed double bottom. It is a nice chart. The sense is that pharma can do its own thing even when the broad market goes the other way, so we are buying in an outperforming sector and a stock that is bottoming out after a correction. So Divis Lab is a buying opportunity for today.
SP Tulsian, sptulsian.com
I am recommending Saregama India, which is RP-Sanjeev Goenka Group company and expect that share can move to about Rs 80 on a week’s time largely because the company has posted good Q3 numbers with topline of more than Rs 50 crore. If you see the improvement into the operating profit margin also the profit after tax (PAT) of close to about Rs 5 crore which translates into an earning per share (EPS) of sub-Rs 3 will definitely be seem quite good because the films and television serial segments of the company has pruned the losses and the music segment has contributed very good at the EBIT level.
The stock is showing very good upmove whenever you have these kind of news coming in. So, maybe once the share starts seeing the buying, it can even move further beyond Rs 80 but the near-term target for the stock is given at Rs 80 and those who want to keep it for next maybe couple of months view, can see further upside of about additional 10 percent or so.
VK Sharma, HDFC Securities
The entire Anil Dhirubhai Ambani Group (ADAG) was under pressure. Reliance infrastructure – positions were added on the shorter side. The stock went down by almost 3.5 percent, it broke Rs 480 level and closed around Rs 479. I would suggest buying 460 Put here at around Rs 7 premium, keep a stop loss at Rs 4 and hope to sell this at around Rs 14.
Another stock that I would recommend creating a bear spread is DLF. This stock has its results on Thursday. So, I am suggesting buying 260 Put and selling 240 Put. So in the process you will incur a cost of around Rs 5. The maximum possible gains for you could be around Rs 15. So the risk-reward ratio would be Rs 5 risk and Rs 15 reward. This bear spread I am suggesting for people who hold this stock as a portfolio stock.