The markets got off to a shaky start for the week as weak global cues dented sentiment and pulled the indices into the red. The Nifty closed at 4,740 down 131 points, while the Sensex shut shop at 16,063 down 352 points.
Sudarshan Sukhani of Technical Trends is not surprised at the ease and swiftness with which the Nifty has broken past these levels. "For the last 10 days, we have been in an intermediate downtrend. When the trend is down, then clearly the pressure can be on the downside. The only question is of timing as to when that down move will come. That can come anytime but since the move is expected, the decline by itself is not surprising at all. I would also suggest that this is probably not the end of a down move. The chances are very strong that we are going to go and test earlier February lows, somewhere around 4,450. If we test them and find support there, we should be very lucky."
Technical Analyst Sudarshan Sukhani of Technical Trends is positive on NTPC.
Here’s how Sudarshan Sukhani views the stocks on board:
On Unitech and NTPC:
You must avoid Unitech because you need to stay away form real estate stocks. They are going to get exhausted and finally give buying opportunities. But we don’t know when, so just stay away.
NTPC has been in a long-term uptrend. This is a sharp correction. An investor who doesn’t want to time the market could simply say, ‘let me nibble at this share and buy a small lot’.
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Vikas Sethi, MD, Sethi Finmart, is bullish on Ruchi Soya Industries, Bharati Shipyard, and Sujana Towers from the midcap space.
Here's how Vikas Sethi views the stocks on board:
On Sujana Towers:
Sujana Towers is the manufacturer of power transmission and telecom towers. It also undertakes heavy structural works for railway electrification, which has got good demand and potential. All the three sectors, which it is catering to, have been seeing very strong demand and this could lead to significant growth for the company in the future. At the current market price of around Rs 115, this stock is quoting at only nine times FY08 earnings of Rs 13 per share. This stock should achieve a target price of Rs 200 in about 9-12 months time.
On Ruchi Soya:
Ruchi Soya is the flagship of the Ruchi Group. It is one of the largest agri-business companies in India. It crushes about 25% of the total soya crop in India and is scouting for palm cultivation in Malaysia and Indonesia. Agriculture as a sector looks very promising in the long run. This stock is also currently trading at around 10 times FY09 earnings and 7.5 times FY10 earnings. I would expect the stock to be touching around Rs 175 in about 12 months time.
On Bharti Shipyard:
Bharti Shipyard has a very strong order book position and aggressive capex plans. The company has recently announced the commencement of a shipyard at Dabhol and has also tied up with the Apeejay Group in West Bengal to set up a very large shipbuilding yard along the country's eastern coast. It is expected to be growing at a CAGR of 50% over the next two-years. At the current market price, it is quoting at a multiple of 11 times FY08 and around 8 times FY09 earnings, which is quite attractive. This stock should reach a target of Rs 900 in about 12 months time.
Source: Interview in Moneycontrol
