Buy Century Textiles, Unichem Labs; Short SBI: Diwan

In CNBC-TV18's popular show Bull's Eye, Prakash Diwan of Prakash Diwan's Wealth Circle shares trading strategy of the day.

The first pick that I have for the day is given the fact that we have robustness in the cement space – it is from that area and that is Century Textiles & Industries. Primarily it is a company that is driven more by cement than the paper business. I would go long on Century Textiles and Industries with a target of Rs 398.50 and a stop loss of Rs 378.50 The second pick is a long and that is from the defensive area of pharmaceuticals- this is Unichem Laboratories. We have seen some very good numbers come through on Q2 but I expect the robustness in the business to continue giving some stock movement upwards. Unichem Laboratories with a target price of Rs 197.50 and a stop of Rs 185.50 is the second pick. It is a contra call of shorts given the fact that we have RBI policy in the offing today. I am going short on SBI. I believe that irrespective to what happens to interest rates the asset quality concerns will overwrite this particular counter and you could probably see a little bit of erosion in value – so SBI is basically a short with a target of Rs 2,121 and a stop of Rs 2,221. The fourth stock is also a short. This is from the metal space, we have seen a slow down in commodities globally and steel prices also within the domestic market have started easing out. Tata Steel would also get impacted as we go into the easing of the commodity cycle. So this is a short on Tata Steel with a target price of Rs 392.90 and a stop loss of Rs 412.90.