Short covering to gather speed; buy Jet, Titan: Experts

The Sensex fell 214 points to close at 18827.16, and the Nifty dipped 61 points to end the day at 5,699.10. Sudarshan Sukhani of s2analyticals says, "Profits were booked on Wednesday when the Nifty touched 5750. That level was the start of a strong support zone and today the markets opened with a gap down."

"Though there were no opportunities to go short, this is a good time to cover up short positions. I do not think short positions should be carried forward for the next day. The market is now entering choppy waters. I am a little afraid of taking any short positions," he told CNBC-TV18.
Regarding the impact of other Asian markets on the Indian market, SP Tulsian of sptulsian.com says that the Indian bourses are already posting a correction ahead of the weakness in the Asian and European markets. “Many stocks have broken their technical as well as fundamental levels. There is little justification for those stocks to be ruling at such high levels and short-covering will set in soon with the expiry just a few weeks away. The RBI’s policy might trigger the short-covering and stocks from the infrastructure, banking, pharmaceuticals and IT sectors will be the most affected."
Sanjay Sinha of Citrus Advisors says that there is enough evidence that the broader market is likely to be more volatile. “And whenever the market has been volatile, it is the interest-rate sensitives that are the worst affected. Investors should act prudent and avoid rate-sensitives till the volatility subsides."
With a 12-24-month view, Sinha advises investors to accumulate, at every dip, rate-sensitives. "Investors keen to take tactical positions can enter pharmaceuticals and IT. Both sectors have the ability to be able to withstand volatility. Though FMCG stocks are the darlings of the market with strong performance over the past one year, I am not very enthused about the sector."
Whenever an Indian company buys a global firm that is bigger than its size, the market starts to get nervous about the debt that the acquirer takes on. SP Tulsian explains that it this trend that caused Apollo Tyres' 25-percent fall today. “It sends a shiver up one spine to see a company with a market cap of Rs 3, 500 crore going in for a debt of Rs 14, 500 crore in foreign currency. The projections and historical earnings of the company acquired by Apollo Tyres are difficult to accept. But I don't think this correction is justified and the share price may settle at around Rs 75."
Tulsian is positive on Jet Airways as he estimates that the Jet-Etihad deal will receive government sanction despite the ambiguity surrounding the NRI status of Naresh Goyal. "I won't be surprised to see Jet touching levels of Rs 490-500. This will boost SpiceJet which saw a correction over last week.” Jewellery stocks have rebounded a bit and Titan tops Tulsian’s picks. "From a trading point of view, investors could enter the stock at levels of Rs 224-225 where it should settle. I don’t think that there is any point in taking a call on any other stocks in the segment. It is better to avoid these stocks."
On Sun Pharma, the market analyst says that the stock has factored in the payment of USD 550 million to Pfizer. "The stock is holding very strong. Though there is a weakness of Rs 8-10, the stock could improve and start to rise. Investors could take a long view on the stock at Rs 940 which seems to be the stock’s support in the near-term."
Tulsian does not hold a negative view on Sun TV which is down 16 percent. "I don't find anything negative in the channel's plans to acquire RComm's DTH arm for Rs 2,000-2,500 crore."