Vijay Bhambwani of bsplindia.com. is bullish on Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) from the power space. “From the banking space, we like HDFC Bank and State Bank of India (SBI). We would also bet our money on Petronet LNG and Cairn India from the oil and gas segment,” he said.
Q: What do the charts indicate at the moment for a next seven-ten day scenario?
A: One aspect is that you need to take out that 4,693 high. That is acting like a dampener on the spirits because traders tend to look at their screens and see the previous resistance and this resistance is very fresh in their minds. You see a breakout above 4,693, good volumes, open interest going up on the long side in F&O. You can take out 4,800–4,850 in a short while because then you will be aided by short covering as well as fresh buying. On declines, 4,100 maybe, give or take 50 points here and there, would become a critical support level to watch out for. If 4,100 or 4,050 is violated on a closing basis, bulls will be on the defensive. Till then I would rather buy on dips then short sell at all.
Q: Can you construct a portfolio for somebody who has not bought anything right now and also for somebody who is already holding a portfolio and has made the gains from 4,100 or 4,200; a portfolio of just four-five stocks?
A: If you are long in the markets if you have a portfolio which has an exposure, fine, just hold on with it, sit on it and wait for 4,800–4,850. If you surge past 4,850, all the more better. Then 5,200-5,300 is what you are looking at. If you are in cash at this point in time, I think the power sector is looking extremely positive. I think Power Finance Corporation (PFC), Rural Electrification Corporation (REC); from the banking space HDFC Bank and State Bank of India (SBI) and from the oil and gas, I would go with Petronet LNG and Cairn India. These six stocks I would bet my money on.
Q: Just in terms of momentum and where you get more gains what would you pick SBI, Union Bank, Allahabad Bank, Punjab National Bank (PNB) or any public sector undertaking (PSU) bank, Infosys, Rolta, Bharti Airtel, Subex? These stocks are going fine but they are already sitting on top of the peak, do you need to go with them or do you need to go with the stocks that have still got momentum?
A: Given the choices that you have made, for example Infosys or Rolta, I would go with Infosys. I feel safe in a largecap. I don’t think these stocks fall as much as a Rolta would. So my choice would be SBI rather than Allahabad Bank or Union Bank, Infosys clearly over Rolta.
Subex is looking like it is making a rounding bottom formation but I would clearly go with Bharti Airtel at this point in time. I feel comfortable in largecaps, no question about it.
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