Buy Tata Elxsi, Cipla; sell LIC Housing Fin: D Cunha

In CNBC-TV18's popular show Bull's Eye, Lancelot D Cunha of ITI Wealth Management shares his trading strategies for the day.

One can buy Tata Elxsi. It trades at about 20 times its FY14 earnings which is a fairly attractive level for a good IT company given expectations of better earnings. With the rupee depreciation one could look at this stock for a little longer term investment horizon. However we have seen very large volumes over the last few trading sessions and the stock had already run-up a bit. I believe this buying could accelerate and we could see the stock moving up further to hit its target price of Rs 195.80. One may buy Jubilant Foodworks. It has corrected significantly from its highs and valuations have now become a lot more acceptable in terms of its price earnings. Given the slowdown in the economy and the high inflationary pressures on the price, results may give an opportunity to buy into this stock for a longer term. However for the day the stock moved with good volumes and I expect the trend to continue given that there may be some more buying. One could see the stock hitting its target price of Rs 1,196. One may buy Cipla. It is trading at a valuation of 20 times its forward earnings which is fairly attractive considering all the other pharma sector companies are trading at above 30-35 times earnings. This gives it an opportunity to buy into this stock. It was weak on the last trading day however the underlying trend being positive, I expect some more buying to emerge and we could expect the stock to move up closer to its target price of Rs 444. One may sell LIC Housing Finance. Over the past few trading sessions it has been finding very difficult to sustain above Rs 200. I expect that selling could continue now that the settlement is behind us  and we could see fresh selling emerge which could move the stock down to its target of Rs 193.50. However from a long-term perspective the stock looks attractive because it trades at about 1.6 times book value which is a good level to look at accumulating the stock.