Bull's Eye: Buy Tata Steel; sell HCL Tech, PFC

Bull's Eye, CNBC-TV18's popular game show, where market experts come together to dish out trading strategies for you to make your week more exciting and compete with each other to see whose portfolio is the strongest.

Remember these are midcap ideas not just for the day, but stocks that look attractive in the medium-term as well.

This week, Rajesh Agarwal, Eastern Financiers, Pankaj Jain, Sunteck Wealthmax and Parag Doctor, Keynote Capital battle it out for top honours.

Rajesh Agarwal, Eastern Financiers

Buy Venus Remedies with a stop loss of Rs 199 and a target of Rs 219. This company is basically into antibiotics and oncology. They have around 75 products portfolio which are exported to 60 countries across the world. On valuation parameters the valuations are extremely attractive. For FY12 the company has reported earnings of Rs 52.62, FY13 I expect earnings to be around Rs 60. Trading at almost 3.5 times earning and 0.67 times its price to book, the valuations are attractive.

Buy Tata Steel with a stoploss of Rs 412 and a target of Rs 425. The counter showed strong momentum yesterday and we believe that this is going to continue even today also. Even on valuation per se the company looks extremely attractive considering the fact that the kind of Reserves they have, the kind of earnings growth they have shown, considering the fact that the company is going for a restructuring in its European operations. We think once this restructuring is complete things would stabilize and the company would report good numbers.

Buy Cochin Minerals with a stop loss of Rs 303 and a target of Rs 335. This company manufacturers the best quality synthetic rutile across the world. The plant is located ideally near Cochin port and very near to its mineral deposit. Reported strong numbers. Last year the profit was up by around 1000%, FY12 EPS was Rs 72.90, dividend declared is Rs 12. Trading at a PE of around 4 times and dividend yield at more than 4% the stock looks extremely attractive.

Buy Timken India with a stop loss of Rs 190 and a target of Rs 210. This company is basically into bearing manufacturing, supplying to many OEMs like Caterpillar, Mahindra and Mahindra and other auto ancillaries. More than 80% of the stock is held by the promoters hence the delisting candidate. The parent has an expertise of more than 100 years hence we think this company is going to do well even if the delisting does not take place in the near future.

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Pankaj Jain, Sunteck Wealthmax

Short Power Finance Corporation (PFC). The stock corrected sharply in yesterday’s trading and this is one of the seven PSUs which have been downgraded by Fitch and post conservative RBI policy where by they didn’t reduce the interest rate I think stock could face further pressure and stock could again be searching levels closer to Rs 145 from which the stock moved recently. The stock closed below its crucial moving average of 50 and 200 DMA.

Sell Syndicate Bank. Syndicate Bank rallied from levels closer to Rs 90 to levels closer to Rs 105 in last month or so and with the very timid kind of, conservative kind of RBI policy banking stocks have corrected and this correction could continue. Bank yields have again soared up and this could lead to further correction in baking stocks and we believe that Syndicate Bank also having come down below its 200 DMA would again be searching levels closer to Rs 95.

Sell HCL Technologies. HCL Technologies post announcement of selling of shares by it CEO and market is flushed with rumors that current CEO may soon resign and we may have a new CEO. Stock is facing pressure from levels closer to Rs 510-515 it is down to levels closer to Rs 470 and we think that stock could be heading to levels closer to Rs 445. It has closed below some of its crucial moving averages.

Buy Genesys International. Basically they are into graphic information space which is used by telecom operators and what we have seen that this stock in last 10-12 trading sessions has moved from levels closer to Rs 150-160 levels closer to Rs 210 and this has happened with very substantial volumes. Generally before that volumes in the stock were very low to the tune of 1000-2000 and in last 10-12 days the volumes are closer to 50000, that means almost 15-20 times the volume.

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Parag Doctor, Keynote Capital

Piramal Healthcare has been in a strong uptrend on both the weekly and the monthly charts and is in a defensive sector. The stock has broken out of the Rs 490 resistance which it was facing since last couple of months and is headed to the 52 week high zone between the Rs 505 and the Rs 515 levels. The stop loss for the trade is around Rs 481 and the target is Rs 504.

Pantaloon Retail has held up well above the Rs 160 breakout zone in the decline which we saw. The stock is headed upward to around the resistance at Rs 178 from the 200 DMA average and the stop loss for the trade is Rs 164. Another reason for recommending Pantaloon is a hope that multi-brand retail will get the nod once we have a new Finance Minister.

Adani Enterprises has broken down below the Rs 220 support which it has held for last month or so. The stock has made a new 52 week low and is headed lower to around a support at Rs 201 levels, the stop loss for the trade being at Rs 216.

Bombay Dyeing is struggling to cross the resistance around the Rs 500 zone over the last few trading days. The stock has started intermediate downtrend and is heading for support around the Rs 460 levels with the stop loss for the trade being at Rs 495.