Stocks to watch: BHEL, HDFC, ICICI, L&T

Global cues wreaked havoc with market sentiment and the indices got off to a dismal start. Short covering post the Left pull out helped the markets wipe out some of the early losses. The Nifty closed at 3,989 down 41 points, while the Sensex shut shop at 13,350 down 176 points.

Vijay Bhambwani of bsplindia.com is positive on HDFC and ICICI Bank.

Here is how Bhambwani views the stocks on board:

On HDFC and ICICI Bank: 

Public sector banks are likely to remain under pressure. It is the private sector banks that will come up in case the markets tend to have any kind of upside. So, HDFC and ICICI Bank has to be a better bet.

On Infosys:

I would look at Rs 1,680 as support for Infosys. A close below this, especially on higher volumes and increased open interest, would be a clear indication that the bears are opening up fresh shorts sales. I would be surprised to see anything above Rs 1,850.

Rajat Bose of rajatkbose.com is positive on BHEL, L&T, ABB and Siemens.

Here is how Bose views the stocks on board:

On Infosys, TCS, and Satyam:

IT stocks have weakened. Infosys is trading below Rs 1,740. A further weakness is likely. If it were to fall below Rs 1,695, then Infy can actually show further weakness.

Tata Consultancy Services has already weakened below Rs 845. Once it goes below Rs 810, you might actually see more weakness coming to that stock.

Satyam is trading much below Rs 484, which is the comfort level for any long side trader. Now, one has to watch for Rs 454 to about Rs 449 levels. If that gets broken, there will be more weakness in IT stocks.

On Reliance Industries:

Rs 1,980 to about Rs 1,950 is the support area for the stock. If this support area gets broken, then Rs 1,890 would be the next support level to watch out for. But this is a sentiment driver. Reliance closing below Rs 1,980 would actually mean it could be a harbinger of further weakness. If it were not to close below Rs 1,980 and claws back above Rs 2,000 levels, then chances are that you might see some improvement in sentiment.

On Balrampur Chini, Shree Renuka, and Bajaj Hindusthan:
Sugar is definitely having a bad session. But then stocks like Balrampur Chini, Shree Renuka, and Bajaj Hindusthan have come to such levels that you won’t see much selling out there. Of course, buying might take some time to emerge. But these are not the levels, where you can go short or take a very negative stance about it. From these levels, you see a good amount of buying emerging. I would be watching for signs of accumulation and then signs of a breakout from here. One can go long. Once the momentum comes in, one can buy. But at these levels, it is not advisable to go short in sugar stocks. The caveat is that I hold some sugar stocks in my portfolio.

On BHEL, L&T, Siemens, and ABB:

I would say BHEL in my opinion has the maximum relative strength. Larsen & Toubro has come close to a resistance zone of around Rs 2,400-2,430. If it manages to cross that level, then L&T would acquire a similar kind of strength and can head higher.

Siemens so far has been showing good strength. But today it is a bit wobbly. Let it cross Rs 484 then one will see good movement. As far as ABB is concerned, I would be looking at a Rs 885 to 891 range. If it manages to get past that, then you will see a good move happening out there.

On Reliance Capital, IFCI, and Chambal Fertrilizer:

Reliance Capital is a very good stock for day traders. When it gives a good move, it gives very good gains. But one can loose a lot of money out there. Today, a number of stocks from ADAG stable gave good moves. Even RNRL did.

Let IFCI cross Rs 39 and only then can you bet more on the long side. But unless Rs 39 is decisively crossed, it will once again become rangebound.

I still need some more movement in fertilizer stocks to get some confidence there. Chambal Fertilizer is my favourite. I would be watching that before I take any position there.

On NTPC:
NTPC is showing good strength today, but one will have to watch for Rs 170 to about Rs 176 levels. That is still quite a distance from current levels. If Rs 170-176 is crossed, then one will see NTPC seeing real good strength. As of now, one can take a long position in this with a stop below Rs 156, but again one needs to book profits if that zone between Rs 170 and Rs 176 is reached.

Disclosure:

It is safe to assume that my clients and I may have an investment interest in the stocks/sectors discussed.