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Entering the stock market? Be warned

May 29, 2008 08:37 IST

The market on Wednesday witnessed short covering a day before F&O expiry tomorrow.

Taking a cue from the Asian markets, the Sensex opened flat today. In a day when volatility ruled supreme, the Sensex swayed between the positive and negative.

What strategy should you adopt? Which sectors look promising? Which stocks to buy, sell and hold?

In a chat on on Wednesday, stock market expert Pranav Sanghavi, director, Jitendra Harjivandas Securities (P) Ltd, replied to many such readers' queries. Here is the transcript:

PRANAV SANGHAVI says, Hello and good afternoon to all. Welcome to the chat and let's begin.

hiformVIz asked, Hi Pranav Good afternoon, please tell me your view on DLF,GMRinfra,IndianBank,IndionOil,AurobindoPharma,UcoBank,VijayBAnk, I am keep on averaging but these stocks going down day by day,I have following stocks:andrabank, ashokley,aurbindopharma,balrampur chini,dlf,gmrinfra,hindalco,indianoil,indianbank,ispat,ITC,JP associt ,L&T,nagfertilize,,NTPC,,Powergri,rel natural,rel patrolem,rel power,seimens,uco bank,vijaybank.Please suggest me which stocks to sell ,which stocks to avrg or buy.
PRANAV SANGHAVI answers,  at 2008-05-28 16:09:20You have mentioned a lot of stocks. I would hold on to most of the stocks that you have mentioned. In the short term the markets still look weak. A couple of stocks like Indian Oil, RNRL and RPL could be churned.
riyas asked, Hi Pranav,Is it wise to buy Bhushan Steel shares at current price. Which steel share is good for 1 to 2 years outlook among Tata steel, JSW steel, Jindal saw, SAIL and bhushan steel. Bhushan 52 week high price is Rs.1730.
PRANAV SANGHAVI answers, I would rater look at TISCO, JSW and SAIL.
Ritesh asked, I have thermax of Rs.460, and Andhra Cement of Rs. 25. Can I Hold this ?
PRANAV SANGHAVI answers, You could hold on to them fo 6 to 12 months.
Shakti asked, Hi, I have invested in REL POWER with 100 shares. What should be the strategy now? old or sell?
PRANAV SANGHAVI answers, You would have to hold on for 2-3 years to see any material benefit. I don't think the stock would see new highs very soon. You could switch to say a NTPC or Tata Power but get in to these stocks also at lower levels.
PRANAV SANGHAVI answers, By Decembe 2009 RPL should have appreceiated substantially from it's current levels. RNRL would only depend on the outcome of the court battle with RIL for the gas fields.
sameer asked, What is your take on hindustan zinc, Kotak mahindra bank, Guj. Minerals and Adlabs. Does these company have lot of potential to do better in the future? Shall i buy these stocks at current prices and hold it for 1 year outlook. Thanks
PRANAV SANGHAVI answers, Hind Zinc and GUj Min are cyclical metal commodity stocks so you will see a lot of price swings over a one year time frame. Kotak had an extremely high exposure to the capital markets and even RBI had asked them to prune their exposure. So this current quarter results will give more insight in to how they will fare over the next year.
IAMSUNIL asked, hI PRANAV, Your take on BHEL & SBI if one wants to purchase at this level
PRANAV SANGHAVI answers, I would wait for a mild correction ad dips to get in to the stocks. I would surely look at them with a 1 year outlook.
jkl asked, view on jmc projects, GMDC, Saamya Biotech, Jetking
PRANAV SANGHAVI answers, GMDC could be looked at. Jetking is one of the leading training institutes spread accross India. That stock could be looked at on corretions.
sameer asked, Is there any bad news about IDBI as the share prices have fallen deeply recently.? Thanks
PRANAV SANGHAVI answers, The hgher interst costs, the higher consumer price index and probable lower corporate performance is being perceived as potential higher NPA's in the future and also thebanks profitability ould be hit if there is a low credit off take.
ravs asked, I want to invest 50k in stock for short tesrm. pls suggest right stock to invest
PRANAV SANGHAVI answers, When the market corrects you could look at stocks like RIL , SBI & L&T.
RamDongre asked, Should I buy LIC Housing,Crompton at this level ?
PRANAV SANGHAVI answers, With the property markets expected to slump byt 10 to 20%, plus high nterest rates makes it a tough proposition for housing financ companies. Crompton could surely be lookd at with a 6 to 12 month outlook.
mnb asked, I had bought NTPC at 216.00. It is around 180.00 at present. Should I hold on ?
PRANAV SANGHAVI answers, I would look at buying more at these levels.
Phil asked, Hi Pranav,Can we hold onto SAIL and Gujarat Ambuja in the current scenario.
PRANAV SANGHAVI answers, Yes you could. The Government has just relaxed the export norms and the major beneficiary should be Guj Ambjua due to its location in Gujarat. I would surely hold on. SAIL also can be held on.
jai asked, Hi pranav, When buying shares, how the 52 week high and low price value significant. Thanks.
PRANAV SANGHAVI answers, It gives you an idea what level are you buying in to the stock at its yearly low or high.
Sunitha asked, Good Evening. I hold 500 shares of IFCI @65.What will be target of IFCI in a week. Shall i hold for better returns or exit with min.losses?
PRANAV SANGHAVI answers, I would switch the stock once I see marginal profit. You could minimize your losses and switch to a better stock.
Manish asked, Please inform your views on Brokerage firms Geojit, India Infoline and Edelweissis. ALso, Is it right time to enter Gujrat Ambuja Cement for long term ?
PRANAV SANGHAVI answers, The brokerage firms may have seen their worst quarter in the past couple of yars. So I would wiat for the quarter ended March 2008 to take a call. The volumes have also fallen drastically so their profitability will be affected. Companies like Edelweiss may balanc their income through other activitie like Investment Banking and Merchant Banking. Yes you could look at Guj Ambuja Cement wth along termoutlook too.
KUMAR asked, Whichsectors look promising? Which stocks to buy, sell and hold?
PRANAV SANGHAVI answers, With the dollar appreciating steadily against the Ruppee that sector could be looked at but with a short term outlook till the dollar appreciation continues. You could also look at cement and engineering stocks.
atufa asked, i have 220 ntpc@186,54 ongc@920 & 60 bhel@1620,when can get decent profit,atleast 15-20 %
PRANAV SANGHAVI answers, You would have to hold on for 6 to 9 months.
Gnan asked, Holding 100 nos of Powergrid @ Rs. 135 and 50 nos of RPL @ Rs. 215. when do u see the stocks reach above these levels with the present market conditions????
PRANAV SANGHAVI answers, t would surely be some time before you see those prices.
bhatkuly asked, what about sesa goa prospects
PRANAV SANGHAVI answers, I have liked the stock for some time. I would hold on to take benefit of the bonus. I think the stock will only rise post bonus too.
Pavan asked, I have MTNL and IDBI is it ok if i hold onto them..
PRANAV SANGHAVI answers, Both could remain underperformers in this market scenario.
Balaji asked, HCL Tech bought at Rs. 270/- should I sell or hold - what price it can reach in 3-6 months
PRANAV SANGHAVI answers, You could surely hold on to HCL with 3 to 6 month outlook.
gopi asked, when nifty crosses 5300 plus
PRANAV SANGHAVI answers, It looks difficult in the near term. THe Nify may take a downward turn once it breaches the 5100 range.
Chanakya asked, What is your view on ITC ?
PRANAV SANGHAVI answers, ITC is a fundamentally strong stock. Even in the Jan and Mar crash ITC did not correct in correlation to the market. It has shownsome good delivery based buying from institutions and I would surely hold on to the stock.
Haridas asked, Good Afternoon sir, I have 2 Shares of MMTC @29,000/-, Shall I want to hold it
PRANAV SANGHAVI answers, Yes wait for the bonus
and split. I think the stock will move us subsequently.
PRANAV SANGHAVI answers, Yes you could surley buy NTC on every dip and you could hold on for 6 to 12 months.
PRANAV SANGHAVI answers, HOld on to all the stocks you mention barring may be RNRL and Rel Infra.
Ganesh asked, How about oswal chemical and fert ? Is it good level to buy ?
PRANAV SANGHAVI answers, In the current market scenario I would probably not.
Chanakya asked, I have invested in City Union Bank and Karnataka Bank. At what rate can I buy more ?
PRANAV SANGHAVI answers,  You would have to wait for a 6 to 12 month period to see gains. You could buy more if the price corrects by another 4-5%.
aditya12 asked, I have United spirits 200 shares. WIll it reach 2000 again in next 6 months ?
PRANAV SANGHAVI answers, You could see that price in9 to 12 months.
Chanakya asked, Mr. Pranav are you there. We are waiting for you to come online.
PRANAV SANGHAVI answers, Yes very much here and answering your queries.
PRANAV SANGHAVI answers, If you take a longer term view then yes it should.
kishor asked, are realty stocks worth buying at this time for period of one year or more?
PRANAV SANGHAVI answers, I would wiat for them to correct further as there is a general feel in the markets that the property markets may correct by 10to 20% in about 9 months period.
PRANAV SANGHAVI answers, Hold.
rrrr asked, what is your outlook about idfc and chambal fertiliser?
PRANAV SANGHAVI answers, I like IDFC as a stock. It is fundamentally strong and has performed well over the past fw years. Chambal also shoudl benefit form the governmet subsidies for the frtilizer sector.
ASHISH asked, Hiiii
PRANAV SANGHAVI answers, Hi Ashish and what is your query?
PRANAV SANGHAVI answers, I think you have made a good choice of stocks. Over five years you should see agood profits on your investments.
Reddy asked, Hi, I bought Reliance Capital on 1210 RS and IDFC on 151 RS can I hold or sell?
PRANAV SANGHAVI answers, You could hold on to both with a 6 to 12 month outlook though.
MPRAO asked, Hello sir iam planning to invest in alok industries for future as a invesment long term can you advise me whether this company is good for long term and you can specify any good companies for investment
PRANAV SANGHAVI answers, I would like to know wh have you chosen Alok Ind from all the other blue chip stocks available in the market?
hiformVIz asked, Can buy grasim,SBI,BHEL ,Rel Ind at current levels
PRANAV SANGHAVI answers, Yes you could but I would wait for a minor correction before I get in.
Chanakya asked, Can you recommend other good diversified stocks like ITC ?
PRANAV SANGHAVI answers, You could look at HUL, Nestle from the FMCG segments and Indian Hotels from the hotel sector.
qurious asked, should i hold Gujrat NRE coke? i bought it at 162, 200 shares
PRANAV SANGHAVI answers, You can surely hold on but witha 6 to 12 month outlook.
Shailendra asked, Hi Pranav, I have brought 5000 shares of Chemplast Sanmar at 22.25. Today it has a rate between 9-10 Rs. What is the future of Chemplast Sanmar?
PRANAV SANGHAVI answers, I don't follow that stock so I wouldn't be able to help you sorry.
sivaram asked, Hi Pranav, I have Rel Pet 800@160, Panacea Biotech 100@297.1, Dishman Pharmacetical 100@286, Teledata Info 1000@16.8, ICICI Bank 50@840, Yes bank 480@204.38, NTPC 200@189.5, Power Grid 350@93.1, Suzlon 100@291, Idea Celluear 200@97.5, GMR Infra 400@137.4, SAIL 100@163.4, Indian Hotels 200@110.5, L&T 50@2794.5, Jain Irrigation 25@590 and Zee Entertainment 200@243. Please advice which to hold and which to sell? Thanks
PRANAV SANGHAVI answers, You have mentioned too many stocks for me to reply within a minute. I would hold most of the stocks you have mentioned as your rates are pretty low.
Chanakya asked, Should I buy/sell or hold Ballarpur Industries ?
PRANAV SANGHAVI answers, It is one of the largest paper players in the country. I would hold on to the stock.
Ganesan asked, What are the future prospects of Hdfc,hdfc bank and Thermax?
PRANAV SANGHAVI answers, I like both HDFC and HDFC Bank. But with the high interest rates both the housing finance and banking stocks are being hammered over the past couple of weeks. They have lost nearly 15 to 25% off their price.
Chanakya asked, Hi Pranav Do you think the oil rally will put speed breakers on our stock market ?
PRANAV SANGHAVI answers, Its not only the Oil rally but the high infltion numbers, potential slow down of profitability of the corporates which is scaring the markets right now.
PRANAV SANGHAVI answers, I would wait for a minor corrction to get in.
PranavSanghavi asked, ADLABS is a tremendous buy opportunity at CMP.
PRANAV SANGHAVI answers, Adlabs has corrected nearly 50% off its highs. I think the stock will take a very long time to reach it's previous highs. You could look at the stock witha 6 to 12 month outlook.
Chinku asked, Pranav what is your take on the current market levels - is it a good time to invest ?
PRANAV SANGHAVI answers, Wait for a minor dip before making investments.
suresh123 asked, Sir i am holdinh HCC @144, NTPC@195 & IDFC @ 160, Yes bank @187 & Canara bank @ 275 levels... what is your views on these in shrttermm.. when can i expect atleast a break even????
PRANAV SANGHAVI answers, You would have to hold on for atleast 6 months to see some profits.
ranjita asked, I have ABB @1350/- Bhel @2200/- L& T @3500/-Bharat Forge @335/-Spanco Tele @245/-&NTPC@210/-What to should I average or Book Loss & enter at lower level
PRANAV SANGHAVI answers, You could average ABB, BHEL, L&T and NTPC at lower levels.
ManishS asked,  hi.. I would like to know the future of RPL. I have purchased 200 shares of RPL @ 250. I can hold the stock for 6-8moneths. thanks
PRANAV SANGHAVI answers, RPL will only tart moving when its commercial production begins or is soon to begin. Once that happens the stock will see an upward movemen again.
sachinkw asked, Hi Pranava, I have reliance power 60@350 should I sell them now or wait for bonus? Thanks Sachin
PRANAV SANGHAVI answers, Wait for the bns so your cost is lowered. You could then look to switch to anther stock.
Kris asked, How is the outlook for GMDC, GVK, GMR, Mundra & FirstSource?
PRANAV SANGHAVI answers, Firstsource is one of the largest players in the outsourcing market and with the dollar appreciating it will only benefit them positively. GMR is a long term infrastructure bet.
prav_001 asked, I have BHEL at 1690. Whats ur say?
PRANAV SANGHAVI answers, I would dive in to the stock between 1350 and 1450 levels.
sunilkrsehgal asked, what is the future of teledata informatics?
PRANAV SANGHAVI answers, Some months back they had applied to the high courts for a demerger scheme. Each shareholder would get 1 shre of 3 to 4 new companies each against each share held of Teledata. I have not rechecked on the company but one should wait to receive the free shares before taking a call on the stock.
PRANAV SANGHAVI says, Well it hs been great chatting with you all. Hope to see you next week. Bye for now.