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Ashwani Gujral's top 5 picks for trade today

Published on Mon, Nov 09, 2009 at 10:05 | Source : CNBC-TV18

Updated at Mon, Nov 09, 2009 at 11:34

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Here is a verbatim transcript of the exclusive interview with Ashwani Gujral on CNBC-TV18. Also watch the accompanying video.

Q: What about for a trader now, how would you approach the Nifty?

A: I have a simple way of looking at the market. If it had to go to 4,200, it would be at 4,200. It won't be sitting at 4,800 for people to get out of the market. So clearly, given that global markets are coming back I also look at something called the Asian dollar index (the dollar compared with Asian currencies), which is headed up, so money seems to be returning. For a Nifty trader any dip towards 4,730, which was a key resistance on the way up becomes a buying zone. Yes, we will consolidate-generally most of these intermediate downtrends take about three to four weeks. We are already in the fourth week, so we can consolidate here. We can start moving higher slowly because both on Dow as well as all those negative prognosis-the market is not supporting them. Dow is above 10,000 in spite of everything, we are at 4,800 in spite of all the news flow. So I think people need to have a bias that is headed up.

Q: Cement was the big underperformer last week, how are stocks like Ambuja Cements and India Cements looking to you technically?

A: Cement remains a laggard. They broke down from their ranges and have sort of come above the lower end of that range like ACC broke below Rs 700 per share and now has succeeded in coming back above Rs 700 per share. So between Rs 700-900 per share on ACC is possible.

Same with other cement stocks so cement is not looking all that strong, it will continue to trade in those clear ranges that it has.

Q: Did you have a look at any of the fertiliser stocks which have started moving, things like Nagarjuna Fertilisers or RCF ?

A: Nagarjuna tends to find lot of support around Rs 26-27 per share. It can have a Rs 10 per share kind of rally, first gets resistance around Rs 32 per share and then Rs 36 per share. Chambal has a strong support at Rs 47-48 per share, from there it can have rally to about Rs 58 per share to about Rs 61 per share.

I think RCF also at lower levels around Rs 63 per share finds lot of support. It can get upto levels of Rs 85 per share to about Rs 88 per share but these are transitory rallies. The budget angle is coming into the picture so you have things like even Jain Irrigation starting to do well. So it would pay for people to look at things from that kind of perspective also now.

Q: A couple of other chart checks with you, Polaris in IT and Ashok Leyland in autos.

A: On midcap IT, Polaris is one of the stronger shares after that big run on one of those days. Now it has come back, heading back towards about levels of Rs 176 per share. One can keep Rs 159 and Rs 160 per share as a support.

What the other passenger auto segment did, commercial auto segment Ashok Leyland seems to be the best play. I think it can easily get upto levels of Rs 60-61 per share and you can keep now Rs 46 per share kind of stop loss.

Q: Give us a quick level check on IFCI as well.

A: IFCI broadly is in a range of about Rs 40-60 per share. It has the stories going on all the time but if you buy it closer to Rs 40 per share then you have a decent margin of safety. If nothing happens, you can still get out at Rs 60 per share but if things happen then probably Rs 70-75 per share is also possible.

Q: What about Aban Offshore , saw a bit of movement on Friday?

A: It is extremely volatile at lower levels around Rs 1,150 per share it tends to find support but will find a lot of resistance now coming in around Rs 1,450 per share kind of levels. I think there are better oil stocks probably Reliance around Rs 1,850-1,900 per share is a better buy than Aban at about Rs 1,150-1,200 per share.

Q: What do you do now as a trader, would you just keep a long position with a target of more than 4,900 or you would like to do it some other way?

A: For the short-term, our key levels are 4,730 to about 4,750 and on the higher end 4,860 which is about the 50-day moving average. On the medium-term you remain long and keep a stop of about 4,700-4,730. So on all declines, the bias needs to be up. I think the short trade is now out since global markets have come back, the market still seems to be a big shot. So on all declines, the tendency should be to buy.

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