Experts suggest stocks that will perk up markets

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Experts suggest stocks that will perk up markets

In an interview with CNBC-TV18, independent investment advisor Rajesh and technical analyst Rahul Mohindra of viratechindia.com spoke about various stocks/sectors and their strategy on how to play them now.

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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

The best way to describe this week's trade is "dull" after indices managed an impressive pullback the week before. While experts believe the long-term bullish trend is still intact, they see a little bit of fatigue creeping in after the relentless upmove for the last several months.

However, the global cues still seem to be supportive, though on the domestic front, lack of positive triggers is making market participants nervous. Today, the Nifty briefly went below the all-important psychological support area of 5900, while the Sensex bleed over 200 points amid selling pressure seen in most of the largecaps.

In an interview with CNBC-TV18's Sonia Shenoy and Ekta Batra, independent investment advisor Rajesh Jain and technical analyst Rahul Mohindra of viratechindia.com spoke about various stocks/sectors and their strategy on how to play them now.

Below is an excerpt of their conversation on CNBC-TV18. Also watch accompanying videos.

On BPCL

According to Jain, "The perspective would be to be invested in BPCL on a day when the news flows are against it.  On a day like today when the stock is reacting to the expectations of Rs 2 hike in diesel and an inline increase in motor oil prices that's the day when you skip buying a BPCL but on a day when you have the darkest clouds you should always continue to accumulate in the belief that these are essential businesses that you cannot do without. I think these are multi-baggers but you should be buying them on dips."

On ICICI Bank

Advising an investor on ICICI Bank, Jain said, "If he [investor] makes a steady accumulation into ICICI Bank, then I think he will be ripping the benefit of  both-the momentum kind of moves that ICICI tends to resort to given the high FII holdings in  the counter and ICICI and also has a host of businesses from which value unlocking either due to sell offs or divestments will result in better than sector gains."

He further added, "Finally in terms of a change in business focus, we have seen ICICI reinvent itself over the last 18-months or so and very clearly the positives of that realignment are beginning to reflect through in the quarterly numbers. So he is getting into a very good play in the banking space and for a five-year horizon he will get superior sector gains easily."

On Allahabad Bank

Commenting on Allahabad Bank, Rahul Mohindra reminded, "Let's not forget first of all that Allahabad Bank was probably around the Rs 50 mark if I remember correctly a year ago. Today we are 4x that so we have obviously seen a huge rally which has factored in several points or views into the price, so what you are seeing in terms of a correction over the last couple of days has been fairly large but again I think there is downward room for the stock to really come down to about Rs 180-185. So I would say lets not rush into it."

He further added, "I believe in the story in the long term but probably if you are trying to time this a bit better I would want things to stabilize. We are not in a situation where the Nifty is holding 5,940. We are not in a situation that banking stocks or the Bank Nifty index is giving us any kind of technical buy position. So I would still say wait it out, you could be a buyer at lower levels but given the one year horizon you want to think of it after the stock corrects a bit more. So as I was mentioning you have got to wait for something like the Rs 180-190 pocket."

On ACC

According to Jain, "ACC has a lot of triggers waiting around the corner, the first is obviously the sectoral triggers, cement is laboring under all the issues on construction, real estate over supply, delayed monsoon continuing and once we see the back of these problems the sector will see a bounce back of first off takes and then the prices, so that's trigger A."

He further added, "ACC specifically has two triggers the first is there has been some delay in commissioning of capacities. ACC is widely believed to be an inefficient cement producer because of legacy issues; it has an inefficient manufacturing distribution metrics. Now the company is correcting that by commissioning new capacities in Orissa, Maharashtra all with huge economies of scale there was a slight delay in that but most of that will be done by early next quarter. So that will trigger off re-rating."

"There is expectation of a combination of ACC, Ambuja Cements so that could be another trigger for the investor. So unless one is absolutely confident of selling out at these levels to buy back at a - 5% or - 10% ideally he/she should stay with ACC as a good investment in the cement space and my personal belief is an easy 25-30% can be made over the next one year," he pointed out.

Mohindra is also positive on ACC. "ACC from the situation we are in now still looks good to me. I think if you have a medium  term horizon, you could certainly hold on to the stock. I think what's really going to happen is on a breakout above Rs  1030 you would probably see very good momentum come into the stock and I think from here on the important support  level or let say the stop loss you want to work with is around the Rs 960-950 mark. That's the key support level. We  are still well above it and I think unless that levels breaks down the long term and the medium term remains fairly intact.  The stock has already corrected over the last two or three weeks and you could see some decent bounce back."