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Market likely to witness lower levels, but watch out for value buying; 3 stocks to bet on

For the next week, Nifty has strong support at 10,655-10,570 levels and resistance at 10,965-11,090 levels.

December 23, 2018 / 01:14 PM IST
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Todays L/H

Sumit Bilgaiyan

On December 21, 2018 both Sensex and the Nifty saw a big correction. Sensex plunged 689.60 points and the Nifty fell far below 10,800 levels, down 197.70 points on Friday.

Markets in the US are seeing a plunge on a daily basis. Dow Jones has crashed from 25,980 to 22,440 in the last 20 days which is almost 14 percent. The Dow and S&P 500, which are both in correction mode, are on track for their worst December performance since the Great Depression in 1931.

Brent crude corrected 38 percent from recent peaks, which is highly beneficial for India.

Next week is a truncated one on account of Christmas. December F&O expiry is also scheduled for the coming week. During the first half, market may witness some lower levels, but value buying will emerge on every decline in quality stocks.


For the next week, Nifty has strong support at 10,655-10,570 levels and resistance at 10,965-11,090 levels.

Century Extrusions | Rating: Buy

During FY18, its net profit grew 174.81% to Rs.3.71crore from Rs.1.35 crore in FY17. Company has posted robust numbers for Q2FY19 also. During Q2FY19, its net profit increased by 127% to Rs.1.86cr on YoY basis on 28% higher sales of Rs.67cr. It’s PAT increased by 175% to Rs.3.36cr in H1FY19. CEL trades at PE ratio of 9.75x. Aluminium extrusion is replacing steel in automobiles and transport which is highly beneficiary for CEL.

Stock has formed bullish price pattern on technical chart with very good volume cluster and momentum oscillators like MACD also entering in buy mode on weekly chart. We are recommending a strong buy for short term trading and long term investment.

Future Retail | Rating: Buy

During H1FY19, company adds 136 new stores. Company has posted good numbers for Q2FY19. During Q2FY19, its net profit increased by 14% to Rs.175.1cr from Rs.153.16cr on YoY basis on 9.37% higher sales of Rs.4928.52cr. This year the festive season moved from 15th Sep – 15th Oct 17 to 05th Oct - 05th Nov 18.

Due to festive season shifting in third quarter one can expects strong numbers in Q3FY19. During Q2FY19 & H1FY19, Big Bazaar has reported same store sales growth of 9.4% and 9.7% respectively. We are recommending a buy in staggered manner for medium to long term.

Schaeffler India | Rating: Buy

During 9MCY18, its net profit increased by 10% to Rs.312.65cr from Rs.284.43cr on YoY basis on 15.9% higher sales of Rs.3375.2cr. Company has completed the merger of INA Bearings India Private Limited and LuK India Private Limited with Schaeffler India Limited during this Q3CY18.

Schaeffler trades at PE ratio of 42x. With a tiny equity base of Rs.16.62cr, it has huge reserve of Rs.2308.67cr. It has paid 170% dividend for CY17. We are recommending a buy in staggered manner for medium to long term.

The author is the founder of Equity99.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on Moneycontrol are their own and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Moneycontrol Contributor
first published: Dec 23, 2018 01:14 pm

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