Know Your Investment: Vijay Bhambwani answers your queries

The Nifty soon recovered to 5130 levels, an outperformance against world markets that analysts say was a dead-cat bounce. Nevertheless, the Nifty closed the week in the red, at 5072. Where is it headed from here? In such a volatile situation, which are the best stocks to invest in? How much will the stocks in your portfolio return over time?

Moneycontrol.com's initiative, Know Your Investment, helps investors take a prudent call on their investments.

This week, technical analyst Vijay L Bhambwani, who is the chief executive officer of BSPLindia.com, plays mentor, giving his take on various sectors and stocks that you wrote to us about.

Below are the questions you asked us on our Facebook page :

Vicky Jotwani: Is this a right time to invest in the market?

Bhambwani: You can start near 4800 in a staggered manner.

Lalit Sharma: I would like to invest in few good companies for investment purpose.

Bhambwani: Stick to blue chips - GAIL , Tata Power , Mahindra & Mahindra and ITC . Don’t invest all money at one go. Stagger buys into three lots; deploy first lot near 4800 levels approximately.

Rakesh Mahapatra: Is it the right time to start bottom-fishing now?
 
Bhambwani: You can start near 4800 Nifty, deploy 30 % and await possible declines to deploy remaining.

Rakesh Khandelwal: What is your outlook on gold?

Bhambwani: Barring some central bank selling and a possible hedge fund default that may cause temporary weakness up to 10%-20%, but I’m bullish on Gold over the long term.

June Paul, Age-23: I have 500 shares of Infosys at 2100. With global slowdown, what should be my strategy in the near-term?
 
Bhambwani: If possible, write deeply out of money calls (strikes 10% -15% above the closing price of recent expiry day) every month. The premium received every month will lower your cost of holding over time. My outlook for tech sector is weak in the near / medium term.

Jayesh Shaw: I have bought 50 Reliance  shares at Rs 760. Can you suggest me a strategy?

Bhambwani: You will have to wait for 18-24 months. It's a very long term investment strategy. I suggest you to hold the stock.

Jatin Kumar: How do you see BHEL faring post Q1 results?

Bhambwani: BHEL is likely to remain under pressure due to cheaper Chinese imports. Instead of quarterly outlook, give the stock 24 months. It's been a high relative strength stock vis-à-vis the indices and it will rally over time.

Gaurav Manwani: Is it the right time to invest in L&T Finance Holdings?

Bhambwani: I expect the markets to remain soft; you will probably get opportunities to buy lower.
 
Poonam Hajare: Can you tell me your view on Bharti Airtel ?

Bhambwani: Hold with a stop loss at the Rs 365 levels if you already own it. If not, await Rs 365 to purchase.

Gaurav Kumar Agarwal, Age-22: What is the position of Mc Dowell Holdings for short-term?
 
Bhambwani: The stock is under pressure due to falling tops and bottoms formation. Decline below 60 levels is not ruled out.

Lavanya Karampudi: What is your call on Raj Television ? Is it a hold right now?

Bhambwani: My outlook is weak. Below Rs 40, long term weakness is indicated.

Nelly Cole Yves: Why do you think is Polaris going down so drastically?

Bhambwani: All software stocks are dependent on western markets. As debt crisis spreads in the west, business prospects diminish and hence, stock prices are reflecting that weakness.
 
Navjot Singh: I have bought 100 shares of A2Z . What are the future prospects?

Bhambwani: Rs 200 level is a support area below which the outlook weakens. Sustained uptrend is possible only after the stock rallies past the Rs 255 levels.

Leo Jed, Age-40:  Which one from the two companies - Paper Products Vs Polyplex Corp are expected to give better returns and why?

Bhambwani: Sorry, I don’t track both those stocks.