Don't be greedy; hold your horses on indices: Experts
Benchmark indices rebounded Wednesday, but experts are advising investors to not get carried away.
April 11, 2013 / 12:50 IST
Benchmark indices rebounded Wednesday, but experts are advising investors to not get carried away.
SP Tulsian of SP Tulsian.com says investors should take a short term view till the market stabilizes."It is better to focus from a limited point of view at least with couple of days view," Tulsian told CNBC-TV18 today.Midcaps and small caps have bore the brunt of the sell-off from February onwards, with many stocks now quoting at half the price they were quoting at a few months back. The steep correction is making many stocks look attractively valued, but investors will have to be choosy."Right now the risk return profile is such that one should stay put and the entire strategy which was earlier buy on declines seems to have changed to sell on every rise. So, one has to just kind of wait and watch how the situation unfolds," Dipan Mehta, member of BSE and NSE said.Experts advise retail investors to stay away till the volatility subsides and a clearer trend emerges.Beginning Friday, market will have a string of news flow, macro as well micro (corporate). There is trade balance data, inflation, key corporate earnings, industrial output and interest rates, which the market will be closely eyeing. But the joker in the pack could be politics, as policy uncertainty has been weighing on sentiment ever since the DMK withdrew support to the UPA government.Fundamental expert Ajay Bodke from Prabhudas Lilladher also agree with Tulsian and Mehta that although there is a scope for a technical bounceback, challenges remain in terms of macro economy, in terms of balance of payment and in terms of current account deficit.Tulsian says it was difficult to take even a negative call for any of the stock from positional point of view. He personally prefers to play in quality stocks and exit with a gain of 2-3 percent. He advices to take one short and one long call. He advices to take a long call on Sun TV with a target of about Rs 371 with stop loss of Rs 363.Among other counters, Tulsian advices to play in stocks like Century Textile, Hindustan Oil Exploration Company or maybe the Anil Dhirubhai Ambani Group (ADAG) stocks. Despite rallying more than 13 percent today, Reliance Communication also presents a good buying opportunity. Around 5-6 percent increase can be looked in to this stock, according to analysts.As far as technical levels are concerned, Nifty seems to be holding on to the strong support of 5500. Tulsian sees 5450 as a good support for the market and 5,700 as a good resistance."So, somebody who wants to take a position in the Nifty can now buy a 5,500 or a 5,600 Call, essentially take a bullish position because we know our exits. We will exit if the Nifty closes below 5,500," Sudarshan Sukhani, s2analytics.com suggested. Most analysts agree that results of Infosys on Friday will decide the near term market trend. Tulsian believes that Infosys may not be able to cheer the market, but weakness caused by its earnings may get covered by automobile stocks which are now likely to bounce back. Even cements stocks could lend support to Nifty he added.Dipan Mehta also remain cautious of Infosys as unlike earlier this the stock has rallied before results. "This time with the way the stock prices have moved you have to factor in that some kind of expectation has got built in and that in itself I think is not a very comfortable position to be in. I would say that better to just take some profits as far as Infosys is concerned," he suggests. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
