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What To Buy, What To Sell?

Monday, August 11, 2014

'Investors may spread their buying systematically in the next six months and accelerate their buying at each correction. Also, it is important to stick to quality stocks and avoid companies with leveraged balance sheets as volatility may be order of the day for at least the  rest of the year. That’s the advise from market experts ADC spoke to. Almost all of them continue to believe that the long term trend is bullish and advise what to buy in this correction for the long term. Some have even advised profit taking in certain sectors that seem overpriced. Dominic Rebello reports..

How do you perceive the present trend of the market?
We remain optimistic about Indian equities in the long run. However, the valuations in the near term look stretched. Current valuation of BSE Sensex is above its long term average. There is hope that the Government carries on with a number of reforms which will lead to better GDP growth and investment opportunities over a longer term.
Nilesh Shetty
Associate Fund Manager-Equity,
Quantum AMC

We are in the middle of a bull market and corrections of even up to 10-15% won't derail it. However, it is our view that it may take couple of quarters for positive  tangible results to show-up in terms of the economy and corporate earnings. We expect the bull run to run beyond 2016.
Vikram Dhawan
Director of Equentis Capital

We believe that the current market is reasonably valued, and we expect the market to provide decent returns from the current level.  After the euphoria of the general elections fade, the heightened expectation has somewhat cooled down, which is quite a healthy development.  The government is taking steps to improve the structural issues and overtime, the cyclical improvement in the economy can be seen in the corporate earnings.
Nobutaka Kitajima
Chief Investment Officer (Equity), LIC Nomura Mutual Fund

I think everyone is having a bullish view on the market and we are also of the same view.  The market is into a consolidation phase. It is making new highs, but not sustaining. However, we are of the view that 7450 - 7350 is going to act as a major support for the market and it s unlikely to  be broken on a closing basis till December 2014. On the higher side we can expect 8300/8400 by the end of December 2014. To forecast nifty by March 2016 is a bit difficult but between 2016 and 2017 we can expect a move towards 12000 on Nifty - based on correlation of past data and US industrial cycle.
Shrikant Chouhan
Head- Technical Research,
Kotak Securities

The Indian equities undertone is bullish; however corporate earnings and global funds flow would be the key to continue the upside momentum. Short term headwinds are seen on account of global tensions around Ukraine / Gaza which might see a sell off in equities as investors may turn risk averse and move to safe heaven assets in case of any eventuality. From a long term perspective, Indian equities are a good investment bet as fundamentals are improving on account of the  strong RBI and government polices expected from a stable government at the center.
Kiran Kumar Kavikondala
Director & CEO, WealthRays Securities

In the next two months we will see the benchmark index Nifty continue a sideways drift and possible break to 7400 levels. It is quite likely that the index will garner enough demand in that region resulting in a 200 point plus rally from there. When markets struggle to break several times, as seen on 7th July and 24th July the 7800 level on the Nifty, markets will usually breakdown from there and that is what we are likely to see in the next few months. Overall the direction is still upwards over the longer period.
Puneet Maheshwari
Director, RKSV

In the short term, there will be significant global and local headwinds such as Fed wind-down of stimulus, tensions in the middle east and inflation. The counterbalancing force will the tailwinds of positive sentiment due to a decisive mandate. By March 2016, Indian markets should be in a sweet spot if something doesn't go drastically wrong with the global markets.
P Phani Sekhar
Fund Manager- PMS, Angel Broking

Any projection for the Nifty/Sensex over both the period?
By December 8300 on the Nifty and 29000 on Sensex.  12000 on  Nifty by 2016 and 36000/37000 on Sensex.
Shrikant Chouhan

We expect Sensex to be in range of 24500 to 27500 and for Nifty 7200 to 8200 for remaining part of this year and our estimates are Sensex might end 2014 around 25500-26000 and Nifty around 7500-7800.
Kiran Kumar Kavikondala

We are close to 7500 (Dec 14) to 8100 (Mar 16) levels as per the stats available now.
Puneet Maheshwari

We expect the nifty to end the year at around 7900-8100 levels.
Vikram Dhawan

Any stock that presently seems over-priced & merits profit booking?
I think almost all good quality stocks are over priced that is why the market is failing to sustain at higher levels, but if we have long term projection in mind then they still hold value of multiplying by 2 or 3 times. Advice is to hold and accumulate.
Shrikant Chouhan

Few of private banks, pharma, cement & infra had decent run up in past few months and valuations are bit stretched. Investors can look at booking some profits at current levels in stocks like Axis Bank, Yes Bank, L&T, Lupin, ACC and await markets to correct before re-entering into these stocks as they are good stocks to be part of investor portfolio.
Kiran Kumar Kavikondala

I personally track only large caps and in that sphere, there are no stocks that are showing even a sliver of exhaustion. In other words, we are in a bull market, buying and holding onto investments is the best way forward for all investors. In fact many stocks look ripe for a move upwards in the short term. I remember the words of famous trader Jesse Livermore 'There is only one side of the market and it is not the bull side or the bear side, but the right side.' and I believe the right side now is to buy.
Puneet Maheshwari

It's our view that Oil and gas sector, except Cairn India, may have run it's course for now as firming energy prices on back of geopolitical factors and bullish view on US Dollar gaining strength globally the margins may come under pressure.
Vikram Dhawan

Your advice to investors…
Buy and accumulate Index heavy weight stocks at each major support. From the mid cap space investors should look for buying those stocks which have strong brand name and having listed since last 15 years.  
Shrikant Chouhan

India offers great long-term potential and investors shall not lose sight of big picture amid market volatility, and are advised to stay invested.  Corrections caused by recent geopolitical issues may be considered as good opportunity to (re-)enter the market as domestic conditions are improving. 
Nobutaka Kitajima

Indian equities had done well in line with global equities this year. For long term investor advice is to look at value driven sectors/stocks in the space of pharma / auto / technology & banks and in mid caps and small caps spaces to create a strong portfolio with diversification across sectors. Also for those with high exposure to equities portfolio, my advice is to buy some puts or write calls to protect any downfalls in market on month on month basis.
Kiran Kumar Kavikondala

Most stocks are in an uptrend, buy them when the market dips in the next two months (~7450 on the nifty) and hold.
Puneet Maheshwari

Investors may spread their buying systematically in the next six months and accelerate their buying at each correction. Also, it is important to stick to quality stocks and avoid companies with leveraged balance sheets as volatility may be order of the day for at least rest of the year.
Vikram Dhawan

Can you give us 5 stocks that merit investment for a period of 3 years?
For 3 years we should look at those stocks which are parallel to the  index and have strong balance sheets correlating to core economy growth. We like Larsen, SBI, Reliance, HDFC Bank and Tata Steel. We cannot leave defensive stocks like Sun Pharma, ITC and Infosys Tech.
Shrikant Chouhan

We are bullish on Cairn India, Godrej Properties and KRBL.
Vikram Dhawan

My picks for long term are Suzlon Energy, Ujaas, Rallis after a correction of 8 to 10% from current levels for long term investment, Sobha Developers and Nalco.
Kiran Kumar Kavikondala

Infosys, ICICI Bank, TV Today, Ashok Leyland, NMDC. All of them have the potential to deliver 75% to 100% returns over the next 3 years.
P Phani Sekhar

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