Nifty support at 5500; bet on Coal India, IndusInd: Experts

Technical analyst Sudarshan Sukhani of s2analytics.com believes that the steep fall in the market is normal and Nifty will see some support at 5,500.

Market analysts SP Tulsian of sptulsian.com and Sanju Verma, MD and CEO, Violet Arch Capital advise investors to bet on Coal India and IndusInd Bank. Below is an a edited transcript of the analyses on CNBC-TV18 It was carnage on Dalal Street with BSE Sensex shedding over 500 points in two trading sessions. Political uncertainty, ETF funds and FII selling and ever-worsening economic data are the key triggers for the downfall. The Sensex closed at 18509, down 292 points or 1.55 percent and the Nifty ended at 5574, down 98 points or 1.73 percent. The benchmark indices have closed below their 200-Day Moving Averages (DMA) for first time since August 2012, which is a bearish sign. Sudarshan Sukhani of s2analytics.com dismisses worries about the steep fall in the bourses. "This is normal. I don’t think we should get worried. There should be strong support around 5,500 but how long that support will hold is difficult to tell," he told CNBC-TV18. Coal India bucked the trend and went up almost 3 percent after the government decided to buy back about 5 percent of the PSU’s shares. SP Tulsian of sptulsian.com says that the move is positive and a similar move could have been initiated in National Aluminum Company Ltd (NALCO). "So some short-covering, a bit informed buying coming and an improvement in the fundamentals justify the rise," he adds. SP Tulsian recommends a trading call on MCX as the stock has been closing higher daily for past four days in tandem with a steady increase in volumes. "Currently it is trading at the day’s average of Rs 3. Investors can look for a stop loss of 0.5 percent. So at Rs 925 they could for a target of Rs 938." The market expert also adds that investors could to initiate a buy call on United Spirits. "I think the stock seems to have bottomed out. My target is for tomorrow is at Rs 1,874 with a stop loss of Rs 1,815." Tulsian advises investors to stay away from stocks such as Jain Irrigation and IVRCL which have been at multi-month and multi-year lows. On the issue of sugar decontrol, Tulsian says that the market awaits the scrap of the levy. "If for some reason it gets deferred then again we will see midcap stocks like Triveni , Dalmia Sugar, KCP, Sakthi Sugar, Bajaj Hindustan, Balrampur Chini and Renuka Sugar that have run up by 6-8 percent to correct on Friday by 5-6 percent." Regarding DLF's proposed sale of its wind business, Tulsian says that the market is too excited as the company finally plans to exit the wind business.
Telecom expects the Housing Development and Infrastructure (HDIL), Opto Circuits, Jaiprakash Associates and Educomp to witness accelerated selling pressure. “I do not think that anyone will really be brave enough to enter these stocks The trend of these stocks is likely to remain weak." Sanju Verma, MD & CEO, Violet Arch Capital advises focus on IndusInd Bank. "The banking sector has been under a bit of a cloud for largely wrong reasons. IndusInd has changed its business mix to focus on small road transports operators (STROs) where though the margins and growth are lower, the risks are considerably lower."