Jan 11, 2017 05:51 PM IST | Source: CNBC-TV18

Continue to be positive on cement sector: SP Tulsian

In an interview to CNBC-TV18, SP Tulsian of shared his readings and outlook on specific stocks and sectors.

In an interview to CNBC-TV18, SP Tulsian of shared his readings and outlook on specific stocks and sectors.

Below is the transcript of SP Tulsian’s interview to Anuj Singhal and Sonia Shenoy on CNBC-TV18.

Anuj: Let me start with the Bank Nifty because I remember last week, you had spoken about it and since then, it is a 1,000 point rally that we have seen on the Bank Nifty. Based on the numbers that we have seen and the overall setup, do you see more gains?

A: On last Wednesday, the Bank Nifty closed at – I am giving the levels – closer to around 315-320. It was at around 17,950 and at that time, I said that the consolidation has seen happened. And actually, let me again bluntly say that no one has been able to read, neither the TV anchors, nor the technical experts.

In fact, they have all been taking the negative view and in fact, in the evening, one of your colleagues have said that the Bank Nifty is going to blast for one week. And again, let me repeat and reiterate that I will be keeping my cautious view and profit booking from Friday onwards. It will be pointless to give the rise on the Nifty level. Tomorrow also it can rise. In the last four days it has risen by 475 points. That means a cumulative increase of 950 points we have seen exactly in five trading days.

Tomorrow, I am keeping a positive stance, but from tomorrow, especially Bank Nifty, I am not keeping a negative view on Nifty because you have a lot many sector rotations which will keep lending the support to Nifty and will keep it positive till expiry. But I will be keeping the cautious view on the Bank Nifty from tomorrow, maybe from after three o’clock because it has to do with the weekly option expiry and after having seen a run up of 1,000 points, I do not see there is any technical or fundamental reason for the bank stocks to move beyond this. And in fact, yesterday if you recall, after IndusInd Bank having came online immediately, I said that it is an excellent results and this will lend support to Bank Nifty.

So, all this data points, the huge accumulation which we have seen in the last week for first three days was indicating that Bank Nifty is going to see the blast. And this is the call which we have been repeatedly giving to our members that keep a positive view on Bank Nifty with a gain of about 500 points because at that time it was very difficult to give a call of 1,000 points because people would have laughed probably or would not have taken it in strides.

So, in a nutshell, positive view till tomorrow, then maybe profit booking and keeping a cautious view on the Bank Nifty because this weekly options are really creating these kind of volatility. So, maybe for the next one week, definitely, I will cut all my long positions in the bank stocks, whether you talk of the private sector or probably public sector if I am a near-term trader or I am keeping the weekly option expiry also in mind. And respecting that, I will book all my positions tomorrow and will keep light or maybe nil positions in the bank stock because keeping a cautious view from Friday onwards for Bank Nifty for the next one week thereafter.

Anuj: Some of these cement names are still way off their previous highs. ACC, UltraTech Cement, Ambuja Cement, anywhere between 20 and 25 percent off their previous highs. Do you get a sense that these stocks could also start to make a move back towards their previous highs?

A: In fact, that is the time you should enter into the stocks. And actually there is no point once it starts moving up. That is the sector where I have been giving positive view. In fact, you need to pick and choose. In the larger space, I will not be too gung-ho or too bullish. Maybe in case of three stocks which are looking good, one could be UltraTech Cement, second is the Ramco Cements and third is Dalmia Bharat.

If I need to pick and choose into the smaller ones, there are umpteen number of stocks available in that space like Sanghi Industries, Kesoram industries, NCL Industries or maybe India Cements. India Cements can get placed in the larger category as well. I will remain away from ACC and Ambuja Cement. But overall, I am keeping a very positive view on the cement sectors and in fact, as I said that the midsized cement companies having a capacity of two million to 10 million tonne will be able to give you better returns.

Sonia: There are a lot of opportunities in the midcap space, what are those opportunities? Any fresh thoughts or any fresh ideas that you have observed in the midcap space?

A: I have been giving those ideas. Just now, I heard Anisha saying that the sugar stocks have seen profit booking. But, if you recall in the morning, I gave DCM Shriram Industries, again a sugar stock which has closed 15 percent up today. It went up to 19 percent but closed at 15 percent. So, what my point is that yes, you have the ideas. Ideas keep coming in and in fact, you have to be, you just cannot take a general call merely on the daily moving average or support or resiliences and you need to pick and choose amongst the sector also.

Just like sugar, you just cannot take a general call. In fact, it is very essential to understand the recovery, fundamentals, expected results which are all to be seen from the companies as we have recommended in the past for Dwarikesh Sugar Industries. So, again what my point is that sugar, cement, auto ancillary, non-banking finance company (NBFC) and housing finance companies, all are looking very good and you need to pick and choose the stocks amongst those sectors.

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