After trading at a high all week, the Nifty closed at the highest level in 2013 but just short of the important 6,100-mark. The Sensex matched the Nifty to end trade at above the 20,000-level. The Sensex surged 134.54 points to 20,073.58 while the Nifty closed 41.85 points higher at 6,092.00. Close to 1,183 shares moved up, 1,229 shares fell, and 164 shares maintained levels.
Sudarshan Sukhani of s2analytis.com, who advised long positions, says that there was not reason for traders to revise that strategy. "The small intraday blips can safely be ignored. These small choppy moves were expected. Investors could make a new long trade today if the Nifty continues to remain stable art 6085-6090. Buy 6,000 calls rather than futures but yes, go long."
Gopi Suvanam of Investworks says that it is likely that the market could touch a new calendar-year high. "That is highly likely as global flows are starting to move away from commodities and bonds into equities. Bourses in the US are already at new highs and emerging markets are doing well across the board."
SP Tulsian of sptulsian.com dismisses the optimism on the rally in OMCs such as
Hindustan Petroleum Corporation (HPCL),
Bharat Petroleum Corporation (BPCL) and
Indian Oil Corporation (IOC).
The 90-paisa per litre hike in diesel prices has not been announced as the government was busy responding to the
Supreme Court's comments in the coal scam and the
celebrations on the poll victory in Karnataka. "I have always maintained that the rally is sentimental in nature, unsustainable and always fizzles out. With the market open for trading on Saturday, investors can take overnight positions such as the BTST (buy today, sell tomorrow) for a gain of about two percent as this price hike is likely to be announced."
Tulsian is positive on
NTPC's earnings and adds that they were better than the street’s expectations. "The exceptional gain of about Rs 1,684 crore has increased the company’s tax liability by over Rs 1,100 crore. If you knock off the amount of the tax from the gain of Rs 1,684 crore, it results in a net addition of about Rs 1,400 crore."
In the last hour of trade, Tulsian picks
Balrampur Chini and
Zee Entertainment Limited. "I will go long on Balrampur Chini due to positive market expectation of the company's earnings. I expect the company to declare a PAT of Rs 86-88 crore for Q4 and a dividend is likely because last year no dividend was announced. So that may cheer the market. I am taking a call of about Rs 54 by Saturday on the stock."
The market analyst takes a short call on Zee Entertainment Limited on corrections in the stock and on fear of a likely fall in stock’s weightage on the MSCI Index. "The stock has witnessed profit-booking for the last few days and this trend is likely to continue. Investors one can look for a day target of Rs 237 with a stop loss of Rs 241.50."
Aptech surged 33 percent ahead during week on reports that along with the declaration of earnings on Monday, the company will also announce a buyback of stock. “With a consolidated topline of Rs 150 crore and a market cap of Rs 250 crore, the management has been trying to shore up value to allow the promoters to make a profitable exit from the company. So on Monday, the stock could move to around Rs 62, ” says Tulsian.
On the EGoM mulling the divestment of the
Bharat Heavy Electricals (BHEL), Tulsian says, “Sometimes you wonder that why government is so keen on divestment in BHEL and
Steel Authority of India (SAIL) at such low valuations. The state of the capital goods industry is pathetic and BHEL's at a price-earnings (PE) multiple is in single digits from a historic PE multiple of 22 and at times as high as 30. The government needs to focus on divestment in other companies and any divestment of BHEL will just spoil the valuations further."
Suvanam's pick of stocks and sectors that could possible lead the market higher from current levels include
Maruti and
Tata Motors where the momentum is strong. "There is a huge re-rating of profitability of Maruti due to high-end depreciation. Amongst banking and other rate-sensitives, I would go with private banks such as
Axis Bank or
YES Bank."
Tulsian is cautious on the rest of the May series due to bank stocks. "There might probably be a correction in PSU bank-stocks. Private sector banking stocks have already topped out and profit-booking may start to set in. The Bank Nifty’s weightage of 20 percent in the Nifty will keep dragging the market down. The increasing number of long positions in the face of a fall in shorts is not a positive trend. Though there is an upside potential of 50 points on the Nifty, it could correct by 150-200 points in no time. So, I am cautious and do not advise long positions."
Ashok Leyland’s earnings disappoint Tulsian. "The earnings are poor on a quarter-on -quarter basis and except for an exceptional gain, the earnings are disappointing. The stock could correct to Rs 20 in the near term."
Tulsian advises investors to buy into the downtick in
Wockhardt. "The level of Rs 1,650 could be a probable entry point. The concerns that cause the stock to correct are resurfacing and low volumes have caused some correction in the stock. But I am not too worried on these apprehensions."
The market analyst expects
Punj Lloyd earnings to be strong with the bottom-line estimated to be about Rs 20 crore and top-line at Rs 3,100 crore. "But I’m doubtful if the company will be able to maintain this level of earnings. Even if strong earnings are declared, I don't think investors should go long. Those holding the stock can even look to exit at higher levels."
There has not been much buying on the Nifty, but Nifty stocks are witnessing a fair bit of interest with the midcap index hovering at 5900-levels. "I don’t think that there is much interest as the rallies in midcap stocks are not sustainable."
