ET NowIn a chat with ET Now, Ashu Madan, COO, Religare Securities, shares his market outlook and talks about some stocks. Excerpts:
ET Now: Do you think, by and large, we are in store for a fairly strong up move on the index, barring factors like macros or perhaps things globally going wrong?
Ashu Madan: Certainly it looks like that. In the past, while most people were busy handling the midcap portfolios, the Nifty continued to inch up. At this level, participation is still very low and people are still in a denial mode, in spite of all the buzz around the positive talk. However, to take a bet on the table is a difficult call. I feel that gradually the Nifty will move up and we could see a 2% to 3% rise in the next 10-15 days. I will not be surprised if the Nifty crosses 8300 convincingly, which is another 200 points from here. One has to get into the large caps with conviction and this month my sense is that the Nifty will be supported by CNX-IT, which will lead this rally.
That said, the sectoral shift will continue and we will probably see automobiles or pharma taking a break or a bout of profit booking, with some other sectors taking over the sweet spot. This run-up in frontline sectors will continue and we could see much higher levels or one can play this run-up with creating a bull spread in Nifty, which is buying one call and selling a higher price call. These are the strategies with which we continue to play this market and we feel that the market is looking at much higher levels, even when we are at 8100.
ET Now: PSU banks were active yesterday and gave up badly today. Where do you see them going from here on?
Ashu Madan: PSU banks still have some struggles left. In spite of the Nifty inching to new highs and sectors outperforming each other, it will be difficult for the banking space, particularly PSU banks, to surpass their recent highs. Be it Union Bank or Allahabad Bank, I do not see much ease for them to cross the recent highs.
Now, if I have to be in the Nifty and IT, probably one hedge could be to buy private banks and sell PSU banks as a pare trade. Otherwise some portion or some percentage of selling off a portfolio could be in the form of PSU banks, since in spite of being positive on the Bank Nifty, I do not see PSU banks having a great run-up.
ET Now: In a market like this, are there any specific sectors or stocks that you would be avoiding?
Ashu Madan: There is not much to avoid, in the sense that there could be a sharp fall. However, the popular midcap names tend to correct much more than the rest of the stocks. I would still be wary of them, because sooner or later, the midcaps will catch up.
Metals is another pack which might take a breather. I mean post the sharp fall in most of these stocks, I am not bearish on the metals pack. However, there is no immediate certainty that they will outperform or perform as per their optimum levels in line with the market. I would tend to be a little wary towards real estate.
ET Now: Which are the big stocks from the IT pack that in particular could move more than the index?
Ashu Madan: TCS, Infosys and HCL are the three stocks that can be bought as a basket. We expect them to turn into a good bargain, probably for this month.
ET Now: Do you think, by and large, we are in store for a fairly strong up move on the index, barring factors like macros or perhaps things globally going wrong?
Ashu Madan: Certainly it looks like that. In the past, while most people were busy handling the midcap portfolios, the Nifty continued to inch up. At this level, participation is still very low and people are still in a denial mode, in spite of all the buzz around the positive talk. However, to take a bet on the table is a difficult call. I feel that gradually the Nifty will move up and we could see a 2% to 3% rise in the next 10-15 days. I will not be surprised if the Nifty crosses 8300 convincingly, which is another 200 points from here. One has to get into the large caps with conviction and this month my sense is that the Nifty will be supported by CNX-IT, which will lead this rally.
That said, the sectoral shift will continue and we will probably see automobiles or pharma taking a break or a bout of profit booking, with some other sectors taking over the sweet spot. This run-up in frontline sectors will continue and we could see much higher levels or one can play this run-up with creating a bull spread in Nifty, which is buying one call and selling a higher price call. These are the strategies with which we continue to play this market and we feel that the market is looking at much higher levels, even when we are at 8100.
ET Now: PSU banks were active yesterday and gave up badly today. Where do you see them going from here on?
Ashu Madan: PSU banks still have some struggles left. In spite of the Nifty inching to new highs and sectors outperforming each other, it will be difficult for the banking space, particularly PSU banks, to surpass their recent highs. Be it Union Bank or Allahabad Bank, I do not see much ease for them to cross the recent highs.
Now, if I have to be in the Nifty and IT, probably one hedge could be to buy private banks and sell PSU banks as a pare trade. Otherwise some portion or some percentage of selling off a portfolio could be in the form of PSU banks, since in spite of being positive on the Bank Nifty, I do not see PSU banks having a great run-up.
ET Now: In a market like this, are there any specific sectors or stocks that you would be avoiding?
Ashu Madan: There is not much to avoid, in the sense that there could be a sharp fall. However, the popular midcap names tend to correct much more than the rest of the stocks. I would still be wary of them, because sooner or later, the midcaps will catch up.
Metals is another pack which might take a breather. I mean post the sharp fall in most of these stocks, I am not bearish on the metals pack. However, there is no immediate certainty that they will outperform or perform as per their optimum levels in line with the market. I would tend to be a little wary towards real estate.
ET Now: Which are the big stocks from the IT pack that in particular could move more than the index?
Ashu Madan: TCS, Infosys and HCL are the three stocks that can be bought as a basket. We expect them to turn into a good bargain, probably for this month.
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