Bull's Eye: Buy TCS, Infosys, Sterlite Ind; Short Sesa Goa

CNBC-TV18 brings you a brand new week of Bull's Eye. It's the 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, Ashish Kapur of Investshoppe, Nooresh Merani of AMSEC Securities and Pankaj Jain of Sunteck Wealthmax battle it out for top honours.
Below their top stock picks and analysis: Ashish Kapur of Investshoppe
My first call is a long position on TCS with a target at Rs 1,335 and stop loss at Rs 1232. The logic for this is simple, the market is in a corrective mode and we feel that defensives are the best places to park money in for the moment. TCS being one of the better players, better managed company, certainly it is a stock which one can look at buying. The sector including TCS has kind of been sideways for last couple of weeks and in this correction there are chances that this sector and particularly this stock could move up to balance the correction happening in other segments and other sectors.
Second pick is a long position on Bharti Airtel with a target at Rs 360 and stop loss at Rs 333. Here the logic is that this is a defensive play especially after the recent fall and the negative factor which was the result we feel has more than been discounted in the price. After the fall over the last couple of weeks at the current price Bharti Airtel represents a good pick for a long-term investor.
Third call is a long position on Hindustan Unilever with a target at Rs 405 and stop loss at Rs 375. It has been in a corrective mode over the last couple of weeks after a very successful run up, beyond Rs 400 the stock face some selling pressure and has been in a kind of a sideways correction over the last many trading sessions, it is a very defensive play and in this present mode of correction it presents a safe bet to rely on.
Final call for the day is a short position on Patel Engineering with a target at Rs 100 and stop loss at Rs 111.5. The logic for this is that this is a company along with many other engineering stocks, which have run up successfully over the last couple of weeks. At the present price all the positives are certainly factored in and there are various negatives which could crop up going ahead. The company has a huge amount of debt on its balance sheet and is facing numerous working capital constraints also the debt on its balance sheet has raised in the last quarter by 20%; this certainly is a grave concern.
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  Nooresh Merani of AMSEC Securities
One can buy Godrej Industries. The stock has been recommended ever since Rs 180-200 levels many a times in the last few months. If you look at the stock earlier the case was buying around support levels. Now what we see is recently it gave a break out at around Rs 215 followed by that it had a 52 week high around Rs 250 levels. And this has been a high for the last 2-3 years. The stock has closed above Rs 250 which opens up into a new territory altogether towards Rs 300-350 levels in the medium term. I would expect the stock to be a good performer from hereon and can catch momentum over the next 6 months.
One can buy Divis Lab. The stock has been facing a lot of support around Rs 700-720 levels for the last 3-4 months. On the longer term charts, on weekly charts we have a huge trend line support coming around Rs 700. I would expect the stock to reverse from this zone of Rs 700-720 and go back to Rs 800-820 levels in the short term. The risk to reward is favorable at current levels and we could expect an intraday target price of Rs 745. Traders may keep a stop loss at Rs 695 for this trade.
One can buy Jain Irrigation. The stock has been in the news for the last many months ever since some corporate action which was taken at Rs 200-250 levels. The stock has seen a huge drifting phase followed by a sharp correction a couple of months back. This correction took it to Rs 80 levels and there were huge volumes which could be attributed to panic selling. Post that the stock has recovered well; in the last rally from Rs 90 to 120 was with large volumes. I would expect the stock to go towards Rs 150 over the medium to long term. My intraday target price for the stock would be Rs 112 and stop loss of Rs 100.
Buy Infosys. If you look at the stock it saw a huge correction from Rs 3400 when it was a volume based selling the first time. Once it crosses Rs 3000-3020 levels, the next target price would be closer to Rs 3400. The short term supports are placed at Rs 2850 to 2900. So as a trader a good risk reward is placed at current levels. A trade can be taken with a stop loss of Rs 2850 and an intraday target of Rs 2990 and a medium term view of Rs 3400.

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  Pankaj Jain of Sunteck Wealthmax
One can go long on Dhanlaxmi Bank with a stop loss of Rs 67.45, target price of Rs 72.95. We have seen a strong rebound in this bank from levels closer to Rs 62 which was also its 20 day moving average though the quarterly results of this bank was not going to be exciting but this bank is a potential acquisition target and recently we have seen the kind of flagged break off on daily charts suggests that the volumes are being built-up and the stock is been acquired into stronger hands for something in offing.
Friday during the closing hours we could see some kind of breakdown in Sesa Goa and the stock closed below its 20 day moving average and 200 day moving average, so we could see there is some kind of informed selling in the stock. The kind of news we have received regarding merger of Sesa Goa and Sterlite and Vedanta group of companies and the merger being not very positive for Sesa Goa shareholders, the kind of pricing, the share ratio which has been done, it is being perceived that it is big negative for Sesa Goa shareholders. MphasiS is a good software company and on 1st March they are coming out with quarterly results. Quarterly results are expected to be strong and buoyant quarterly results. Apart from that the company is sitting on a pile of cash and we have heard from the company that they cannot utilise this cash in an assertive way maybe we could expect some kind of buyback from the company. So taking these two-three conditions into consideration and taking the fact that from levels closer to Rs 360-365 we have seen a steady kind of build up in the stock.
I have gone long on Sterlite Industries with a stop loss of Rs 116.90 and target price of Rs 123.95 for the day. For catalysts for going long on Sterlite is the merger ratio which has been announced for the company. Every five shares of Sterlite would fetch three shares of Sesa Goa. Now Sterlite has been married to Sesa Goa and it would reflect the trend which Sesa Goa would take.