KYI: Expert sees Sensex at 21500 by Mar 2013, picks stocks

The Indian market started the first trading week of 2013 on a strong note. For the week, the Nifty gained 1.8 percent and the Sensex rose 1.7 percent.

Moneycontrol.com got Vivek Negi, manager research and education, Wellindia Group to answer the stock queries you sent us on our Facebook page as part of KYI (Know Your Investment). Check out his comments. Don't miss: IIFL picks 13 lucky must-have stocks in 2013 Linu John Ninaparampil: Will the Sensex reach 23,000 in this year? A: I believe it may touch higher levels. As we have seen in the past, the market has peaked before the election year. We are expecting Sensex to make new highs of 24,000 by March, 2014. We have a target of 21,500 for March, 2013. The government is taking right decisions, RBI is expected to cut interest rates from January onwards, and inflation seems to be under control. Fiscal deficit is the only concern. Going forward, the market will remain bullish. Gaurav Shah: What's your short-term view on Reliance Power? A: It's a very tricky stock. The stock was looking to breakout before OFS. But we have seen intense pressure during the process of OFS. The stock corrected from Rs 98 to Rs 92. There is very strong support around Rs 92 and equally strong resistance at Rs 105. It may remain in the same range for the short-term. But long-term outlook is really good. One can buy at current level for a target of Rs 124 in one year. Joel Peter Lobo: What about Canara Bank, Larsen and Toubro, L&T Finance, JSW Steel and Suzlon? A: Canara bank seems to be bottoming out in the long-term. Buy on declines can be a good strategy. L&T is doing well. Accumulate stock around Rs 1,600 for a target of Rs 1,950 till year end. L&T Finance is trading in over-bought territory. Buy only on sharp declines. The stock seems to be overvalued from fundamental point of view. But it's a very good candidate for banking license. Guru Allu: Is it the right time to buy Jaiprakash Power and Kingfisher Airlines? A: I believe you should be with top performing companies. KFA is a big no. If you want to pick anything from aviation space, it should be Jet Airways. Deal with Etihad will add significant value to the company. It may touch four figures in couple of years from now. JP Power can be a good stock from trading point of view. Buy below Rs 37 with a stop of Rs 35 and wait for a target of Rs 44. From power space, accumulate Reliance Power for the long-term. Nikhil Gupta: What are your views on ITC and Tata Global Beverages for this month? Is something fundamentally wrong with ITC? A: Looking at the past record of ITC, it has always corrected sharply after a run up. The stock has entered into bear territory. But there is a very strong support between Rs 272 and Rs 275. It may go back to Rs 292 during January. Tata Global beverages had a dream run during last six months. It is trying to consolidate making a formation of Pennant. Pennant is a continuation pattern and the break-out will be above Rs 170. After crossing Rs 170 comfortably, it may touch Rs 192 by the end of the month. Prasad Kulkarni: What is your view on PSU banks and energy sector for 2013? A: PSU banks have already started rallying. I am expecting this rally to continue. But you should very careful with stock selection. Our top picks from PSU banks would be IDBI Bank and Dena Bank. Energy sector may remain lacklustre. It will be more or less with the market. _PAGEBREAK_ Kashish Kumar: I have 100 shares of Steel Authority of India at Rs 95. Should I hold or sell? A: The stock has just bottomed out. It has just entered in intermediate bull trend. It will continue to rally as long as it maintains above Rs. 90. It may decline in the short-term as currently trading in over-bought territory, although, it may touch Rs 112 in the next couple of months. Rahul Marathe How about holding Shree Renuka Sugar in the current year? A: The government is working hard on de-controlling sugar prices. But nothing has been implemented. Most of the sugar stocks trade on the back of the news. You can continue to hold, if the government comes out with regulations on de-control. Otherwise, this can be excellent trading stock. Buy below Rs 30 & exit around Rs 35. Santu Das: What about Idea Cellular? A: The stock has just given a fresh breakout above historical resistance level of Rs 103. It has formed a rounding bottom formation which is giving a target of Rs 132 on the stock for the next three-six months. From the telecom industry, Idea seems to be the perfect chart for the intermediate investment. Mukesh Lovely Thareja: When will Titan Industries cross Rs 300? A: The stock has a very strong support below Rs 280. At this price, it seems like no risk trade. If it closes below Rs 280, just exit. It will go back to Rs 310, if it closes above Rs 289. For the time being, it is consolidating between Rs 280 and Rs 290. Chandrayee Sarkar: What are your views on NMDC and Mahindra & Mahindra? A: Both the companies enjoy very strong fundamentals. NMDC seems to be undervalued. It has corrected sharply during the last few months. There is a very strong support between Rs 155 and Rs 158. It will start rallying, once it will cross above Rs 172. M&M may be very good for the long-term. But de-control of diesel will have negative impact on the stock for the short-term. If you are holding this stock, keep a stop loss of Rs 920 on closing basis. Junaid Reda: What about JP Associates? A: JP Associates has rallied from Rs 60 to Rs 105 and now is consolidating to start a fresh rally. The company has recently worked on reducing its debt burden. We expect JP will witness India's infrastructure growth story. With increased focus of the government on the infrastructure sector, stocks like JP Associates may become a multibagger in the long run. Buy the stock with a target of Rs 280 in the next five years. Basavaraj Dk: What is your near-term target for BEML? A: The stock is trading near five-year low. It has made a strong base around Rs 270. But it could not participate in the market rally during the last six months. Technically, it's very weak on the charts in all the time frames. Avoid BEML, pick L&T from the same space. Hemendra Pradhan: What about Union Bank and Federal Bank? A: This is accumulation period for the banking stocks. The rally has just started. Fundamentally, Union Bank is better placed than Federal Bank. As we suggested earlier, you need to be very careful while picking up stocks from the banking sector. We suggest IDBI Bank from PSU space and Yes Bank from the private sector banks. Avoid Federal Bank, you may buy Union Bank on declines. Jagadeesh Sekaran: What's your long-term view, target for Rei Agro? A: It seems like a drastic stock. Exit as soon as possible. Enter in better stocks for the long-term growth. Wellindia Market Outlook: We predicted a level of 5,950 (Nifty) for the year end at the start of 2012. It,s just a co-incidence that market closed very near to 5,950 on Dec 31, 2012. We still believe the market is trading in the intermediate bull trend. We have a target of 6,150 for the month of January. With the expectations of interest rate cut and big announcements in the budget, the market may touch 6,350 by March. The Nifty will touch a high of 6,750 during 2013. Following reasons would serve the purpose: Inflation would come down below comfortable level of 7% by March.

• The government has taken various initiatives to control fiscal deficit which will show its impact in the coming quarters.
• According to earnings, we have seen worst during last quarter, now companies would declare better earnings with improved earning guidance for the coming quarters.
• With ease in interest rates and flows from FIIs, liquidity situation would push markets on the upside.
• Pending regulatory issues will be resolved during next one year which includes GST, De-control of Sugar, Norms for new banking licenses, Regulatory framework for Real Estate industry etc.

We would like to give two stock picks for intermediate:

• IDBI Bank: The stock has just given a fresh intermediate break-out. Buy stock around Rs 115 for a target of Rs 140 in the next one year.
• L&T: Increasing focus on infrastructure and cut in interest.