Mkt rallies: Experts say hold long position, best bets here

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Mkt rallies: Experts say hold long position, best bets here

It's been a good day for the bulls. The Nifty pierced through the 5,000 resistance zone, riding on strong cues from Asia. Infrastructure, metals and banking stocks piled on the gains. Strong earnings reports from the likes of HDFC Bank and Bajaj Auto also helped boost sentiment.

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Moneycontrol Bureau

It's been a good day for the bulls . The Nifty pierced through the 5,000 resistance zone, riding on strong cues from Asia. Infrastructure, metals and banking stocks piled on the gains. Strong earnings reports from the likes of HDFC Bank and Bajaj Auto also helped boost sentiment.

Banks, metals, oil & gas, power and auto stocks led Thursday's rally. The Sensex rose 192.27 points, to close at 16,643.74, supported by index heavyweights ICICI Bank, L&T and Reliance. The Nifty moved up 62.6 points, to end at 5,018.40.

Sudarshan Sukhani, s2analytics.com explains that the reason market did not gallop up is because of the large gap open. He is optimistic that the trend is intact and now is the time to hold long positions.

Dipan Mehta, Member BSE and NSE agrees that it is important that we hold these levels for a month or two which will be really be a confidence booster.

However, Mehta warns that more problematic results be it in the infrastructure space or public sector banking or oil and gas results can get pretty tricky and one really needs to see what the level of the Nifty and the Sensex will be, around middle of February.

According to Mehta there are two broad investment themes for the next two-three months. He is positive on HDFC Bank , IndusInd Bank , Axis Bank , Yes Bank and ICICI .

The other sector Mehta is bullish on is midcap IT. By and large, he suggests to structure the portfolio more on the midcap side and look at some of the beaten down stocks where PE ratios are below five times and the business is not as badly damaged on account of the environment, domestic as well as international.

"So it's a good time for stock pickers. The best strategy would be to look at the results and then take a more informed decision rather than just anticipating what the performance will be because midcaps are by and large very difficult to predict, how the quarterly numbers will be," Mehta elaborates.

Shashank Khade, Executive Vice President and Head - Portfolio Management Services (PMS) holds somewhat a different opinion. "Given the fact that there is going to be pulls and pushes from ownership, over owned stocks or for that matter under owned stocks so it is going to be quite a volatile sort of a rally and could tease a lot of the investors in to investing the type of stocks which they avoided substantially in 2011," he adds.

Khade thinks that liquidity is aiding to this rally and most importantly the FIIs are back with lot of investments which we have already seen.

He warns that it is going to be a tricky earnings season. Khade explains that there are two large gaps in valuations- one is between IT and pharma companies and the next is between the largecaps and the smallcaps.

"You are looking at disproportionate moves happening in the beaten down stories for CY11 and those are really coming back with a vengeance. So it is actually giving you a whiff of sort of a risk on situation coming back and people are willing to take some risk right now," he adds.

Nasrin Sultana

nasrin.sultana@network18online.com