Bull's Eye: Buy HPCL, HCL Tech; Sell BHEL

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, Aashish Tater of Fort Share Broking, Pankaj Jain of Sunteck Wealthmax and Nooresh Merani of AMSEC Research battle it out for top honours.

Aashish Tater, Fort Share Broking

I am going long on SpiceJet for a target of close to Rs 30 with a stop of around Rs 27.20. We feel SpiceJet is one stock which should be part of ones portfolio from a longer term perspective because its inevitable that FDI in aviation will not happen. Its just matter of time that it will happen and thus a stock which could go and see Rs 40-45 level once this particular aviation story develops, we feel the risk reward perspective on the stock is attractive and thus can be bought from longer term perspective.

Buy HPCL for a target of close to Rs 315. We feel the structural breakdown for crude started right from that Rs 108 mark where we actually came out with a short on Cairn and long on HP and IOC and BP. We feel this could be a good risk reward perspective onto the entire OMC, thus going long on this stock from next 3-4 days perspective, the stock should see level of Rs 315-340 range. Thus keeping a stop loss of around Rs 290 from next 3-4 days perspective will be highly rewardable to short term traders.

I am going to short Syndicate Bank. Looking at its numbers and the way NPAs have shaped out we feel the numbers are going to disappoint the street. We had a negative call onto the entire PSU sector and we still maintain our negative view to neutral view because few of those stocks are punished very badly. Thus Syndicate Bank would see further crack down to close to that Rs 84 in next 10-15 days perspective. But we are recommending a sell for intraday target of close to Rs 90 with a stop of around Rs 100 on closing basis.

I am going to short TTK Prestige for a target of Rs 3000. We feel the way the stock actually started its run up right from that Rs 100 mark, we do not see any reason for the stock to out perform and still maintain. The company market cap is close to Rs 4000 crore and the company’s profit price earning multiple is very high. Even on brand revaluation and other aspects we feel the stock is terribly overvalued. We just recommend an avoid on this stock and on intraday because of its poor results as per our expectations, we feel the stock could easily go and test this mark from next 10-15 days perspective.

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Pankaj Jain, Sunteck Wealthmax

Sell BHEL. The kind of activity we saw in BHEL in Fridays trading session, it broke past that support that final support zone of Rs 220-225 and it has formed a new 52-week low. We have been seeing consistent weakness in BHEL post that IPO deferment of disinvestment theme for BHEL. Apart from that lat 3-4 quarter results have been pretty poor and then the kind of pressures the company is facing with respect to fresh order flow, I think no new power projects are being announced because of obvious reasons because of the kind of confusion that is prevailing in this sector.”

Short call on Sintex Industries. It’s a high beta stock, high beta activity and with active shades of operator driven activity. Apart from that even the performance of the company has been pretty lackluster for last few quarters. The kind of pressures, company is facing with respect to menacing rise of dollar vis-à-vis rupee, I think that is adding to the concern. It is expected that the rupee-dollar scenario would not change much in coming few months.

Short UCO Bank. UCO Bank would be seeing that this midcap PSU bank space is facing sort of serious negative momentum and post that announcement of likely implementation of BASEL III norms in 2013 onwards there has been concerns. There have been added concerns in the market that we could see serous equity dilution and return on equity could be eroded. UCO Bank Q4 performance was also pretty timid, nothing very exciting performance. Profits were about 11-12% compared to the corresponding quarter last year.

I have gone short on Syndicate Bank and one of the catalysts for going short apart from that the stock was already showing added weakness in Friday’s trading session is that Q4 performance, the results announced by the bank have been pretty closer to poor kind of category. Profits rose by only about 6-7% compared to last year. NPAs have again increased and then again we have been seeing that stock is already trading well below its major moving averages.

Nooresh Merani, AMSEC Research

Buy HCL Technologies with a target price of Rs 540 and a stop loss to be placed at Rs 500. This is one of the few stocks which has been closing up on its new highs, like the previous high was around Rs 525 levels. So once the stock crosses that level we could expect some momentum into the stock. Given the fact that the stock has been holding in a falling market also, one can buy the stock with a stoploss at Rs 500.

Buy Marico with a target price of Rs 190 in the day and a medium term target price of Rs 220 and a stop loss to be placed at Rs 170 for this trade. This is a FMCG stock which has not moved for the last 1-2 years. I would expect the stock to breakout over the next few weeks. As well as given the fact that it’s a defensive, one can buy at current levels with low downside risk of Rs 170 and an upside to Rs 220 in the medium term.

Buy ICICI Bank with a target price of Rs 845 in the day and a stoploss to be placed at Rs 815. Although the stock has fallen a lot over the last few days as well as it’s in a negative territory technically but what we see is the stock saw some recovery on Friday from lower levels. As well as it is very oversold, so one can play a bounce back trade keeping a stop loss at Friday’s low of Rs 815.

Buy Glenmark Pharma with a target price of Rs 355 in the day and a medium term target price of Rs 370 and a stop loss to be placed at Rs 325 for the stock. The stock has given a breakout and has been holding nice for the last few days. I would expect the stock to catch momentum in knee recovery with the markets, so one can expect a quick move to Rs 355 in the next week and maybe a bit higher to Rs 370 plus in the short term.