The markets have been patchy since quite some time now. Though it is sitting well above the 13K levels, experts are advising caution. But amidst this caution, what would the experts buy? Here are two experts answering the question.
Amit Dalal of Amit Nalin Securities picks Sterlite, which according to him is a great play on commodities. "Both copper and zinc of commodity are doing fairly well. Aluminium is perhaps the only commodity, which hasn't shown incremental reasons for seeing higher and higher profitability," he explains.
He further adds, "The fact that it is going into power is perhaps another plus on it because it kind of balances out its earnings pattern. It is also going to be a huge consumer of power for itself." He therefore recommends it, "It's a stock, which one should very seriously consider. It's expensive right now, but otherwise it's an investment opportunity."
Giving his choices among the aviation stocks, Dalal says, "If one believes that for instance, Deccan Aviation has got its pricing model, its capex ratios right, then that's a stock that one should remain invested in because they are going to be here for another five-seven years at least. Whether it's Jet or Kingfisher, they are going to have a national presence, which will be international in time to come and therefore one should remain invested there only because one believes in their ability to grow."
But at the same time, he cautions as well, "As a space, it's dangerous to be in, as there will be volatility and months or quarters on end, when one will not see profits."
Coming to the index that saw a good amount of upside yesterday, Dalal confirms that he remains a fan of the private sector banks. "This year was a great year for banks because they got a big upside from the stock in trade position they had," he says.
So what would he pick in this space now? "Given that an ICICI Bank or even a young bank like Centurion Bank or a DBS or Yes Bank, will give you greater growth than you will get from the public sector banks next year. This year, they will continue to do well," he explains. "On the other side, the public sector banks are comparatively very cheaply valued, so there is going to be re-rating on their valuations," he adds.
Technical analyst, Rajat Bose focusses on PSU bank, Bank of India. "It moved up pretty sharply. If you look at Bank of India, today's Rs 185 level would be quite crucial and if it stays above that, then you might see it going upto about Rs 191 or even above that. The next target would be Rs 198." But he voices his concern, "But one thing I have noticed is that whichever space moves up on one particular day, the same sector doesn't move the very next day. So I am not sure whether the banking stocks will continue to move up today."
Giving his picks in the media space, Bose says, "Zee Telefilms looks good. And if you go slightly offside, then I like Inox Leisure, although in entertainment and not typically a media stock."
In the construction space, Bose discusses Mahindra Gesco Developers, which closed around a very strong resistance area of Rs 950. "This resistance area is going to give the stock some trouble. Initially it will shoot up, but after that it might have to come back to this level to consolidate."
In the manufacturing space, Bombay Dyeing has notched up quite a bit of gains, yesterday about 57 points. So today, according to Bose, the crucial level would be yesterday's high, Rs 762.
"So Rs 760 is the level I would be watching out, and if it can cross Rs 760-762, then you will see another 25-30 point move, but it has to sustain above that. If it doesn't, then it can fall below Rs 745 and consolidate around those levels," predicts Bose.For more on markets & business, log on to www.moneycontrol.com.
