Maintain long positions; bet on M&M, Zee: Experts

The markets witnessed strong momentum. with the Sensex closing the day at 19,577.39, up 181.58 points and Nifty ending trade at 5,898.85,  up 56.65 points, along with appreciation in the rupee. Sudarshan Sukhani of s2analytics.com advises investors to maintain long positions despite two occasions of intraday consolidations during trade. "These are essentially short-term trades which means either one exits at a profit today or at the most carries it forward for tomorrow."

Despite a good day of trade, the IT segment was dull after comments of Infosys scaling down its FY14 revenue guidance and the impact of the US Immigration Bill. Ambareesh Baliga of Edelweiss Financial Services says that the dampening affect of the US Immigration Bill along with a steady rupee might actually see a further correction in the IT stocks going ahead. Reliance Communications was one of the stars in the broader markets on news of repayment of loans. The stock has already rallied 80 percent on a year-to-date (YTD) basis and is currently trading at levels of Rs 130. SP Tulsian of sptulsian.com says that he does not expect any negative news.

"The company after having entered into a long-term contract with Reliance Jio cannot afford to have all these defaults and it has started to receive strong support from the Reliance Group as well. But I have maintained the view that at Rs 135 the stock seems to be face strong resistance. I will continue with my cautious stance on the stock and advise investors to book profit at current levels and perhaps look to reenter at lower level of Rs 125-127." Mahindra and Mahindra (M&M) witnessed a smart rebound on better-than-estimated growth in tractor sales — 17.5 percent month-on-month growth. In the light of a further slump in auto sales, Tulsian says, "If you really take a call based on the monthly sales, M&M probably looks the strongest amongst the lot. Though there has been a slight fall in exports, the overall the performance of the auto major has really been good. So, I remain positive on the stock." United Spirits soared 6 percent as Morgan Stanley raised its stake in the company with a purchase of 10.8 lakh shares at Rs 2,118 apiece. Tulsian views the development as positive but expects some profit booking in the run-up at Rs 2500-2550. "Mangalore Chemicals is another UB Group stock which has been continuously going up for last one week —from Rs 42-43 to Rs 55. I expect a stake sale in Mangalore Chemicals. However,  the big run-up in United Breweries Limited is a surprise for which the reasons are unclear."
In the backdrop of Zee Entertainment Enterprises rising 4 percent, Tulsian holds a positive view on two media stocks — Sun TV Networks and Zee Entertainment Enterprises. "Zee Entertainment Enterprises has been strongly holding at current levels and I do not think that it has corrected below Rs 220 in whole of the June series when there was a lot of concern and apprehension regarding the media sector. I think the level of Rs 260 seems to be the near-term resistance." JP Infra witnessed an intraday spike to post an up move of around 17 percent. Tulsian says that all real estate stocks rose by 4-10 percent in the day's trade. "JP Infra is more a real estate participant than an infra company. However, despite the reasons for weakness in all stocks of the JP Group, there is little reason for JP Infra to correct. The company's Yamuna Expressway project is on course and development of the land the company owns is in full swing. Renewed buying at the lower levels maybe one of the reasons for the stock to correct." Procter and Gamble (P&G) has forayed into the oral-care market. The market expert says he would not buy P&G but the conglomerate’s oral-care foray will pose a threat to Colgate. "Though I won't buy P&G at current levels, I am cautious on Colgate." Future Retail has come down from Rs 119 to around Rs 95 levels. Tuslian attributes short covering to be the reason for the correction in the stock. "The stock is likely witness some renewed buying which could push the price to  Rs 104-105."