Bulls take a breather: Are you taking the right stock bets?

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Bulls take a breather: Are you taking the right stock bets?

In a chat with CNBC-TV18's Sonia Shenoy and Anokhi Parikh, technical analyst Ashwani Gujral and Satish Betadpur, MD of MMI Investment Managers, spoke about strategy on various stocks and sectors.

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Excerpts from Your Stocks on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 31/05/12 Are Mutual Funds betting on Nifty? Other Stocks in this news Jaiprakash Associates | Bharat Petroleum Corporation | Hindustan Petroleum Corporation | Oil India | Oil and Natural Gas Corporation | Hindustan Unilever | ITC | IFCI | Gammon Infrastructure Projects | Hindustan Construction Company | Shipping Corporation of India |

The bulls are taking a breather after being on rampage for the better part of last month. It was a quiet day for the market- at 14.28 hrs IST, the Sensex is down 84.82 points or 0.41% at 20458.26, and the Nifty down 41.15 points or 0.67% at 6145.30.

In a chat with CNBC-TV18's Sonia Shenoy and Anokhi Parikh, technical analyst Ashwani Gujral and Satish Betadpur, MD of MMI Investment Managers, spoke about strategy on various stocks and sectors.

Here is an excerpt of what the experts had to say. Also, watch the accompanying videos.

On Reliance Industries

Gujral believes Reliance is trading sideways right now. "It's sideways between Rs 920 and Rs 1,140 and the 200 day moving average (DMA) is right cutting across the middle-exponential 200 DMA is at Rs 1,020. So the idea should be that if it stretches too far below Rs 1,020, say Rs 100 lower, you tend to buy it. If it tends to sort of stretch about Rs 60-70 on the higher side-you tend to sell it. If the market remains good you could get Reliance at Rs 1,065-1,070. 

However, he cautious that it shouldn't be taken as a sign of strength rather it should be seen as the upper end of the range where people who got in earlier around Rs 950 odd could look to book profits. "Reliance is not a leader in this bull market. It is not expected to make fresh high, yes, quantitative easing would take commodities up and that would have its rub-off on Reliance but it's not expected to outperform."

Betadpur says, "I don't know whether there will be a sustained rally in Reliance going forward. Now, the issue is with the way markets are moving up and India is moving up, a lot of exchange-traded funds (ETFs) have Reliance as one of their largest holdings. So, Reliance will move up as the fund flows come into India. Outside of it, it's not outperforming the Market by any stretch of imagination. For it to outperform, the global environment has to improve. I have been saying this time and again Reliance is not an India oriented stock, it's a global stock and as such global refining margins have to pick up before Reliance starts doing well. So, as long as index moves up, Reliance will move up and may be late in the economic cycle Reliance will start outperforming. So, if you are a holder of Reliance, you have to wait for may be a year or so to see substantial outperformance from these levels."

On JP Associates

Gujral see JP Associates as "dog" in the market. "You need to be careful with such stocks, which are coming back because the market is gone up higher. JP Associates had strong support around Rs 118-120 and from there it's come back a whole lot. The next key target here is probably closer to Rs 143 again trading perspective means that on the sideways stock you do not expect them to make new highs. What happens is that once it will get to Rs 143-150 kind of levels people will buy in and then they will find the stock coming back to Rs 120. The idea here is that it will face stiff resistance between Rs 143 to Rs 150. In case somebody has it at Rs 120 those are the targets that he should be looking at. But these are not my choices because these stocks are not at new highs," he cautions. 

On oil and gas space:

Gujral says, "I like the way government tries to predict oil prices that this is temporary. Oil has re-entered a strong uptrend. Given the way quantitative easing is likely to happen, it is likely that oil prices go up much further. So, on oil and gas, I think the strongest stocks are the oil PSUs, BPCL , HPCL ; they have restarted a move. So, chances are that incase diesel prices are also increased finally these stocks will move higher. BPCL targets of Rs 990 are still possible. HPCL, we could see levels of Rs 650. OIL also looks good. ONGC after a correction to probably levels of Rs 1,250-Rs 1,300, that should move higher to about Rs 1,550. So, oil PSU lot looks good. I believe oil itself is looking quite strong."

On oil marketing companies (OMCs):

Betadpur says, "I agree with Gujral that if there is a diesel price de-control then all of the OMCs will have substantial re-rating upwards. Our favourite pick among the OMCs is BPCL because they have capacity expansion on the cards that is coming up soon and also good demand of oil and gas exploration basins around the world that are showing good promise. So, Rs 990 or Rs 1,000 price target for BPCL is quite possible, given where the valuation is and given the forward earnings and revenue targets for BPCL. So, if one is a believer in the diesel de-control then definitely one needs to be in this segment, all of these stocks are going to do well and its just that our pick is BPCL."