Expect Nifty to correct 60-70 points by expiry: Tulsian

The remaining four days to the expiry could be tumultuous for the market, says SP Tulsian, sptulsian.com. He expects Nifty to correct about 60-70 points by Thursday. He advised to track global cues as they can probably have an effect on market expiry.

Tulsian is keeping his positive stance on Sun Pharma and Wockhardt, which cracked last week. From a short-term point of view he prefers going with Wockhardt. His outlook continues to remain positive on the real estate. "Long positions have been created in majority of the stocks which got liquidated because of the weakness which we have seen in the last weeks," he added. Also read: Sukhani keeps close on eye on 5970; suggests 4 trading bets Below is the verbatim transcript of his interview to CNBC-TV18 Q: A whole host of cues are lined up for next week. In your mind which is the most important trigger that you would watch for? A: One has to look for the global cues. There are indications we keep getting from the Japan, Europe and America. Earlier we were only keeping a track on the US market and what will be its effect on our expiry. Long positions which we have been seeing on pharma, banking and capital goods sector are all seen quite risky. So, any negative cues coming in from there and tapering off of the Foreign Institutional Investor (FII) inflow will also be creating the confusion and pessimism in the market. That is the reason for whole of four days till expiry I am keeping my cautious stance, because I am expecting that probably two to three days will be dull and boring. One will be finding the market in a very narrow range with a mild negative bias and one day could be a big negative which can make the Nifty to correct to about 60-70 points. This is just a guesswork looking to the trend which we have been seen for last six to eight months, the range bound behaviour ahead of the expiry. So, taking a cautious view I expect that Nifty probably could correct to about 120-125 points by the expiry. Those are the indications which we need to keep a track and see that effect reflecting into the Nifty behaviour. Q: There were two pharmaceutical stocks that cracked a whole lot last week, Wockhardt was down 30 percent and Sun Pharma was down post the disappointment that we got from Taro. If you had to buy either of these two stocks which one would it be? A: I am keeping my positive stance on both the stocks. The Taro effect may largely have factored in into the price. Again going forward the kind of grip which we see on the Sun Pharma stock is seen to be quite strong. So that will keep the price robust for the stock in the time to come. However, if I need to choose between two probably I will go with Wockhardt. The kind of pessimism and the liquidations seen in the stock does not warrant. There is going to be a reduction by about 10 percent in the top-line and bottom-line. So, even if you take the conservative estimate the share is now ruling at a PE multiple of less than 8 which makes a good entry point. So, amongst two from a short-term point of view I will go with Wockhardt. Q: The sector that got thrashed last week was real estate. We saw stocks like DLF, Housing Development and Infrastructure (HDIL) tank about 15-18 percent and I notice that all the stocks that you have recommended for next week are within that space itself. Do you see a lot of opportunity there? A: I am keeping my cautious stance on the Nifty and on the market. That is the reason you have rightly pointed out that all the real estate stocks have taken a beating of 15-20 percent. My outlook continues to remain positive on the real estate sector and that was the view sounded couple of weeks back also. That has been the view of the market as well. So, long positions have been created in majority of the stocks which got liquidated because of the weakness which we have seen in the last weeks. So, the resumption, the under-ownership, the liquidation or the exit of the weak hands probably will see the renewed buying interest coming back into the stock. Since my view is positive on the real estate sector, I have chosen one stock from each geography. 1) From Bangalore I have chosen Brigade Enterprise. 2) From Mumbai I have chosen Peninsula Land, who will also be declaring their numbers on Monday. That is likely to be quite good because of the sale of one of the property which they have developed off Don Mills at Lower Parel. 3) Two stocks I have chosen from the National Capital Region (NCR), one is DLF and second is Anant Raj. The kind of corrections or beating which we have seen in DLF also seems to be unwarranted. We are likely to see the renewed investment based buying coming in DLF. Apart from that Anant Raj has been continuously reducing their debt. Recently they have liquidated some of their debt instruments as well. I am keeping my positive stance on the entire real estate space. However, these are the four ideas I am giving for next one week to 10 days view.