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Hot stocks and sectors for this week
Prasanna Zore and Piyu Sen, Moneycontrol.com | May 30, 2006
Moneycontrol gives a list of stocks and sectors that look good for this week. They advise investors to buy on declines and average at lower levels rather than invest all money at one go.
Vijay Bhambwani, Technical Analyst: Look at technology as a defensive sector
I would look at technology sector as a defensive sector. Domestic pharma sector and capital goods sector can be looked at. The stocks that one can look at are DRL, BHEL, and TCS.
Investors should buy on decline and average at lower levels. It is a better idea rather than investing all your money in one go.
Disclaimer: I have open positions in TCS
Sumit Rohra, Antique Stock Broking: Look out for steel and auto
Sector, which will stand out, is steel. I am very bullish on stocks like Tisco, SAIL. There would be lot of activity in Infosys. Auto, especially two-wheelers, is one sector, which will do well as the monsoons will arrive.
There is a talk of a petrol price hike coming on Monday. If the petrol price hike comes and stocks like Maruti, Tata Motors, react negatively by 5 per cent then it is a great time to buy. So it is a reason to buy auto because Monday will be the last chance to enter the sector.
Sachin Chavan, Technical Analyst: Auto, steel, FMCG can be looked at
What would have happen is that stocks that have fallen would bounce more, which is a natural phenomena but this would lead people to think that those are the better ones, but that might not be the case.
One should rather look at stocks that have maintained their levels during the fall. Auto, steel and if monsoon sets in then FMCG will also look good.
Look at long-term performance of the company
One should look at longer-term performance of the company. If you are looking at it technically then look at 6-12 month chart then take your picks, rather than looking over the last week or so.
Shankar Sharma of First Global: The largecaps are going to lag behind the midcaps:
Our take is that it is time to reverse the strategy of being long on largecaps and underweight on midcaps. We think that the midcaps are now going to be outperforming the largecaps in a significant way, because they have endured a lot of pain in the last nine months. The largecaps are going to lag behind the midcaps.
Underweight on retail and neutral on construction:
We are underweight on retail and neutral on construction. We have liked these two sectors for a long time, but have turned moderately negative on them for the last couple of months.
Continue to be negative on banks, financial services:
We continue to be very negative on banks, financial services companies, housing finance companies etc.
We are least sanguine about steel:
We are quite okay with metals by and large, except steel. We think irrespective of the run up in steel stocks, the results are telling a very different story. So within the overall metal space, we are least sanguine about steel. We like the Hindalco etc.
There is a lot of value in midcap auto component stocks:
The auto components were fairly high in terms of valuations. I think a lot of them relative to their earlier highs, had been underperforming. The auto component companies are not large cap companies even now and we quite like that entire space. We think there is a lot of value in the midcap space there.
It is time to get back into Infosys:
We now think that IT is going to be the leader of the next phase of this market.
IT stocks have reasonable valuations and pretty good visibility. In this scenario, we are looking at visible earnings growth and definitely see that in IT stocks. For us, IT now falls in the category of defensive bets, rather than aggressive bets. We continue to like Satyam and we think it is now time to get back into Infosys.
Still bullish on largecap stocks like Reliance and Bajaj Auto:
The largecaps we continue to be very bullish on are stocks like Reliance, Bajaj Auto and big pharmaceuticals because according to us, nothing has changed there.
Pashupati Advani of Advani OTC Dealers: At these kinds of market caps, one can pick up Arvind Mills and India Cement
Better-known midcaps like Arvind Mills and India Cements have actually come down about 25-30 per cent. One can actually look at those and say let's take a good shot at these, as these are well known world-class brands.
At these kinds of market caps, they should be picked up and we have a chance of their moving up to equilibrium again.
Rs 150-200 below the peak is good time to get into Reliance:
Reliance has actually been touted as being the stock to buy, if one wants to be with a single stock in India. Rs 150-200 below the peak is probably good time to get into it again.
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