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Ashwani Gujral's top picks for today's trade

Published on Thu, Oct 08, 2009 at 10:43 | Source : CNBC-TV18

Updated at Thu, Oct 08, 2009 at 15:22

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Technical Analyst Ashwani Gujral's advises buying Piramal Health , Electrosteel Casting , Henkel and Aurobindo Pharma while he advises selling Mphasis in today's.

Here are the key levels to watch out for:

Piramal Health: Buy

Target of Rs 440 per share

Stop loss at Rs 396 per share

Electro Cast: Buy

Target of Rs 46 per share

Next target of Rs 49 per share

Stop loss at Rs 43 per share

Henkel: Buy

Target of Rs 55 per share

Stop loss at Rs 43 per share

Aurobindo Pharma: Buy

Target of Rs 850 per share

Stop loss at Rs 793 per share

Mphasis: Short

Target of Rs 567 per share

Stop loss at Rs 652 per share

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

On MphasiS:

Yesterday was the first day where the technology stocks sort of broke down for the short-term. So one could sell MphasiS today with a stop of about Rs 652 and a target of Rs 567, particularly, stocks which have run up a lot are vulnerable because they will tend to fall a lot as well. The stocks will come down to support levels and then probably rally from there. As market corrects rupee probably depreciates. These stocks will tend to appreciate, so wait for lower levels to buy into them.

On Piramal Healthcare:

Particularly, in flat market healthcare and fast moving consumer goods (FMCG) tends to do well and midcap healthcare made fresh highs yesterday. So one could buy this with a stop of about Rs 396, target here for the day could be about Rs 440.

On Aurobindo Pharma:

It closed at fresh highs yesterday. One could buy this with a stop of Rs 793, target here could be about Rs 850.

On Electrosteel Castings:

It's a metal related play because commodities are showing some kind of bounce. So in the smaller space this stock did well yesterday. One could buy with a stop of about Rs 41, it could see targets of Rs 46 and Rs 49. Particularly, the idea is to concentrate on midcap and smallcap category because that is outperforming while largecaps are sideways. So I am avoiding largecap metals.

On Henkel:

FMCG comes in various colours. So Hindustan Unilever and ITC probably have run-up but Henkel is making a fresh high; above Rs 40 it has broken out. So we could buy this with a stop of about Rs 43, target here could be Rs 55.

Q: What about metals, that's the space that held out yesterday, stocks like Sterlite and Hindalco?

A: Hindalco is in a bit of a range--Rs 115 on the downside, Rs 140 on the upside. Stocks like Sesa Goa are looking much better and may see fresh highs. Rs 270 is a support, next resistance here is Rs 315 and an overall target of Rs 360. Sterlite broke out; now it has support at around Rs 750-760, it can get up to Rs 900. So, some of the metals are looking good. JSW Steel trying is to move out. One could get levels of Rs 950 there. However, SAIL and Tata Steel seem to be iffier. I think Jindal looks much better.

Q: Two big flyers from the past seven days--Jet Airways that's up nearly 30% and IRB Infra that's up 13%?

A: Jet Airways continues to move up, and probably, it's a good idea to keep a trailing stop on that now. Rs 400 is a decent stop there; Rs 450 will provide quite a bit of resistance, above that we could get another Rs 50 on the upside. Infrastructure stocks came back, we will discuss Gammon Infrastructure Projects and it has come back from strong support. The support there is Rs 92, resistance is Rs 110 and Rs 123. Also Lanco Infratech did quite well; we are expecting probably levels of Rs 550 there.

Q: What about sugar, we have seen moves there again in the last couple of days?

A: Sugar has consolidated and the flood situation is putting upward pressure on international sugar futures. Bajaj Hindusthan came back from levels of Rs 175-176; it needs to cross Rs 203 to probably get back to about Rs 225. Balrampur Chini made fresh recent highs; so Rs 123 is a support there, we could get back to about Rs 140. All the sugar stocks are now coming back from consolidation and agricultural stocks maybe back into play because now we have flood situation also which is likely to put food situation back into favour.

Q: How would you approach Reliance from a trading perspective now--Rs 2,160?

A: It is still in the range of Rs 2,060-2,070 to about Rs 2,200-2,210. So if one is getting this pop almost to about Rs 2,200, one would be much better-off taking profits because I don't think Rs 2,210 level will get crossed so easily.

Q: What's your sense of how to trade the Nifty? It keeps going to 5,050 kinds of levels and then coming back to below 5,000. Do you have a clear sense of direction?

A: The idea is that the market is trying to cool off. The volatility is actually reducing; it is only 150 points. So 50 points here or there is small volatility and this is likely to cool-off before we have another surge which will take 5,100 out and move higher.

So chances are we may get 4,850-4,900 on some kind of global correction and Infosys may not lead to the rally that we are expecting. We may rally from the 15 or 16 of this month. So the Nifty is trying to cool-off a bit and it is contracting cycle after which we may see range expansion from here.

Q: Where does the support lie now for Bharti Airtel?

A: The support is the entire area of Rs 330 to Rs 350. The idea is that this stock needs to form a long base before it can sustainably move up. Since market has turned sideways it's unable to show strength but there is no merit in selling it now. The news tends to get discounted quite fast. So probably another Rs 15-20 is the downside left but it will go through a long bottoming process before any kind of sustainable upside is visible.

Disclaimer:

It is safe to assume that my clients and I may have an investment interest in the stocks/sectors discussed.

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