2 weeks Ago
"From those oversold zone, yes, market will attempt a bounce and that bounce can come to 24,000, 24,200 and again market will slip on the downside. So, I am very clear, this is a sell on rise market, current levels we are highly oversold and we might expect some amount of bounce for next week," says CA Rudramurthy BV, MD, Vachana Investments. Given the fact that the markets are slipping where do you see the markets now halting this sort of a move? Where do you see a support and resistance for Nifty now? CA Rudramurthy BV: In fact, last time when I spoke with Soumeet on the same markets at noon show, I was very clear Nifty was at 24,750 where I said we will see 3% to 5% kind of a correction and Nifty will come to 24,000, that was 750 points away from the levels which it was and even Bank Nifty I was looking for targets of around 50,000 to come.
Now, we have already seen that 5% kind of a correction from where I spoke on Nifty and Bank Nifty. But let me be very clear, markets have broken crucial short-term support which was at 23,800 and having slipped below 23,800 yesterday and markets continuing its downward move, now yes around 23,400, 23,300 we might find some short-term support. From those oversold zone, yes, market will attempt a bounce and that bounce can come to 24,000, 24,200 and again market will slip on the downside.
So, I am very clear, this is a sell on rise market, current levels we are highly oversold and we might expect some amount of bounce for next week. But post that bounce again at higher levels, market will see some amount of selling and that is still good for a market which has already seen a gigantic move in this year itself and we have already corrected around 2,500 points plus on Nifty and Bank Nifty has also corrected hand fully and very important is you are only seeing 10% correction in index but see lot of mid and smallcap and broader market people were simply buying all the shipping stocks, they were buying lot of stocks of railways, defence stocks, valuation no one even thought of and all these guys who were simply buying left, right, centre ignoring valuation have seen already 30% to 50% kind of a correction in their portfolio. Stock Trading Options Scalping Made Easy By - Sivakumar Jayachandran, Ace Scalper View Program Stock Trading Market 101: An Insight into Trendlines and Momentum By - Rohit Srivastava, Founder- Indiacharts.
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As you are saying that it is a sell on rise market, then what should investors do? Should they continue to stay away from the market for some time more or is there any counter, any sector that you find is something that one should start accumulating at current levels? CA Rudramurthy BV: Great question and let me be very crystal clear to these investors who are there long term, you have to buy whenever there is froth and whenever there is this kind of bloodshed in market and then only you will make money for the next two years, three years kind of a time frame. Short-term trading is different, investing is different. So, for investors answering your question, I will tell them you be very stock specific and you be very sector specific and let me give you the answer very clear according to my experience of over two decades in market and with my research I feel IT is one sector where you can still buy lot of stocks where results were good and still market were punishing them.
Look at Wipro for example, for me stock at current levels of around 570 is a mouthwatering buy, I would not be surprised to see Rs 800 on Wipro to come within one to two year which is a return of 40-50% and irrespective of market yes, IT will be one sector where I will be looking at buying opportunity and on every fall I will buy stocks like for example Wipro. Tech Mahindra also came with fabulous results and you are getting that stock at whatever current price or even dips to 5-10% from current market price Tech Mahindra will become attractive. So, in general for me IT looks very good.
And second look at PSU bank, every stock which has come out with results from PSU bank let it be either SBI or let it be Canara Bank , PNB , all of them have come out with good results. So, for me PSU bank especially the names whatever I told looks very-very attractive and even private banks valuation comfort is still there, look at HDFC Bank and ICICI Bank , two private banks which you can buy at current level. And for me OMCs looks very-very attractive at current market price because crude oil prices are coming down and I would not be surprised if crude breaks $70 which is a very strong support, it will come down to $60-62 per barrel and OMCs will be the biggest beneficiary.
Look at Hind Petro, Hindustan Petroleum looks very-very attractive at current price of around 370-375 and be very-very sector specific and stock specific. Some names like for example Indus Tower, Indus Tower at 315, 320 looks very attractive to me. Look at Federal Bank 195, 200 levels, results were fabulous looks very attractive.
So, you have to be sector specific, stock specific, buy where results were good and those stocks have also got beaten down and buy stocks where you have valuation comfort and I have given enough names and examples to you and your viewers. And when it comes to the auto space, how are the auto stocks looking like on charts? CA Rudramurthy BV: I am very crystal clear on my view, I will avoid autos because of valuation concerns and I know yes, Tata Motors has corrected already from those 1150 levels, you have seen Tata Motors even coming below 800 if I am not wrong and I would not be surprised till you might see some more correction in these stocks, the same thing happens with even your other stocks like whether it is Eicher Motors , Maruti , all of these stocks have corrected enough. I will still not venture into any buying in autos in general.
I will wait for some more correction which can be another 10% from current level and might be Tata Motor at around 700 zones, might be Maruti even after another 10-15% kind of a correction from current level, might be stocks like Escort which is very good for me another 5-10% kind of a correction from here, Ashok Leyland might be levels closer to 220 might look good. But at current market price I will avoid auto, some more correction can be seen. I will avoid FMCG, some more correction can be seen.
I will be very sector specific and stock specific and just repeating this for the benefit of your viewers, look at IT in general as a sector, look at banks both PSU as well as private banks and the names whatever I have mentioned and also look at stock specific where results were good but still the stock has got beaten down and the names I have already given, already if you see PSU banks and private banks except Indus India Bank all the banks both private and public banks gave good results but because of bad market everything has got beaten down. So, now you have to buy these stocks where you have comfort in terms of valuation, results were good, you have to cherry pick them and names as I have given look at SBI, look at Canara Bank, look at PNB, look at HDFC Bank, ICICI Bank and in OMCs I told Hindustan Petroleum, Indus Tower and you have to look at IT like Wipro, Tech Mahindra and you have to stay with real good sectors and real good stocks with result and valuation comfort. (You can now subscribe to our ETMarkets WhatsApp channel ).
