Jan 19, 2013, 04.53 PM IST
VK Sharma of HDFC Securities suggests investors, in his analysis on CNBC-TV18, to buy National Hydroelectric Power Corporation (NHPC), whose volumes quadrupled from levels seen on Thursday, as the market demand for power stocks starts to return. Sharma also suggest investing in LIC Housing Finance which has started to move up.
VK Sharma of HDFC Securities suggests investors, in his analysis on CNBC-TV18, to buy National Hydroelectric Power Corporation ( NHPC ), whose volumes quadrupled from levels seen on Thursday, as the market demand for power stocks starts to return. Sharma also suggest investing in LIC Housing Finance which has started to move up.
Below is an edited transcript of the analysis on CNBC-TV18
Power stocks were back in demand on the street and leading in terms of volumes was National Hydroelectric Power Corporation (NHPC) which saw volumes almost four times than what it had on Thursday. From that perspective, a lot of open interest was also added. Looking at the kind of open interest that has been built, NHPC can be bought next week. So I suggest buying the 25-call at around Rs 1.5, with a stop loss at Rs 1 and hope to sell this during the settlement at around Rs 3.
Another stock that also looks good is LIC Housing Finance. It has just begun its first day of moving up. It corrected almost 6 percent from the highs of Rs 300. Today, open interest of 4 percent has been added to the stock and the price has also appreciated by one percentage point. So I suggest buying the 280-call at around Rs 8, with a stop loss at Rs 5 and sell this at double the premium - at Rs 15-16.
Markets face resistance; Nifty likely to correct soon
After expansion comes contraction - this is the theme which the stock markets have begun to work on. This letter has been upbeat on the market. We still are, when it comes to the long term. The short term scenario may be different. For short term traders the strategy should be to take swing trades lasting one or two days, only on extremes.
Action in NHPC
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