Where do you see the market headed and when can we expect the next leg of the rally?
Finally after a good seven-eight days of gains, we witnessed first signs of correction for the indices. I think one should probably try and take this in a very healthy manner assuming there will be no major damage on the global arena.
I had already indicated before that the market has to get into some sort of a consolidation as such kind of a steep uptrend may not last for too long and it may not be healthy for the market overall. So we are now getting back into that mean reversion phase on the indices.
But that also does not mean that we start buying immediately on the first day of a sharp correction. We have to find out the points where the market will get into an equilibrium phase which means when the selling abates and when we will see good emergence of buying coming across into the market internals.
So till the time we do not see that sign I would believe that this correction/consolidation should continue.
Talking of some of the stocks that are on your radar, which sectors and stocks are looking interesting to you?
In this phase of the market rally there is no point of going into high beta stocks and it always makes a lot of sense to bank back again on the large cap names.
So we will look out for classical outperformers or the relative underperformers which have underperformed the majority of the sectors. For example L&T was one of the first picks which I had highlighted and I would still suggest this as a buy.
I think L&T at the 1920-1930 levels still looks very attractive from current levels. I would still look out for the 2000 break on L&T possibly in the next one week or so which could be an immediate target for the stock. The stop loss for L&T could be kept at Rs 1890.
Next I would initiate a sell on
specifically expecting the stock to correct and moderate from the last three-four days of price rally. I would keep a target of Rs 250 with a downside stop loss of Rs 268.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
