[ad_1]
Rudramurthy also says: “REC, PFC are clear sells and also look at the last five days. Both Nifty and Bank Nifty have made lower high and lower low formations. Today being the expiry for February, we might be just seeing markets consolidating, but the big selling will come from the new series which can start fro
m tomorrow or from Monday and also tax adjustments should happen for FY23-24 and a lot of selling should come in March.”There is no sign of massive panic in the market despite what is happening? People have taken it in a good stride, haven’t they?
CA Rudramurthy BV: My view has definitely got altered after seeing yesterday’s move. In fact, let me give one or two important points. Yes, SEBI is concerned and whatever letter they have given to AMFI is definitely a sign of excessive valuation seen from the regulator end. But keep aside this fundamental news and the regulator news, also look at a lot of good funds like SBI, Kotak. All of them are saying that we do not want to take any more funds. So, this is a clear sign that generally keeping both the midcap as well as smallcap index, you are not finding great opportunities and even if you find them, valuation is definitely a concern. Also I feel everything is too much priced in the overall market and it is better to wait on the sidelines, have some gunpowder and then buy. So, I have changed my view on the market and I am not bullish right now, I am very cautious. In fact, it is good to have some cash, some gunpowder with you to buy at a lower level. That is when you will make money.
Unlock Leadership Excellence with a Range of CXO Courses
Offering College | Course | Website |
---|---|---|
Indian School of Business | ISB Chief Technology Officer | Visit |
IIM Kozhikode | IIMK Chief Product Officer Programme | Visit |
IIM Lucknow | IIML Chief Executive Officer Programme | Visit |
Even at index level, if you see Nifty and Bank Nifty, I have more comfort there than in the midcap and smallcap index. Earlier, stocks used to move 5 times, 10 times in three to five years. They were all 5 baggers or 10 baggers in three to five years but today people are doing it in six months, that is definitely concerning me and everyone today wants to get into F&O, do option buying and they think they can double their money every day.
With 21 years of experience in the market, these are clearly not good signs. Medium to long term, I am very bullish on the market but it is good for a medium to longer term bullish market to have some correction. At the index level, I feel a correction of 5% to 10% and at mid and smallcap level a correction of 20% in general is very good for the market.
What are your top picks in terms of stock specific action? Where are you recommending booking profits or is there a positive trade in terms of a buy action?
CA Rudramurthy BV: I am very clear. In fact, last Diwali, I very clearly mentioned that PSUs will do great and in October-November, BHEL from Rs 130 went to Rs 230-240. REC, PFCs or Coal India, all the PSUs, SBI, Punjab National Bank, Canara Bank all moved like rockets. But right now, I say it is just not yet over but the only thing is I expect some correction in PSUs and then buy the dip.
I am very bullish on PSUs even at the current level, but a dip is good and we get it at a better price or if someone has a three- to five-year kind of a view even at current prices, I will buy good quality PSU stocks and for me SBI, PNB, all this at small correction of 5-10% from current level will be a good entry point and anyone who wants to buy this market be only there.
Now, when it comes to shorting and overvaluation, I am seeing excessive valuation, especially in FMCG and even in the paint sector, Grasim is coming in because of which Asian Paints has already seen enough correction. Look at Hindustan Unilever, I am not comfortable. So, there are good shorting ideas.
In fact, in FMCG, valuation is a concern for me and also a few PSU stocks which have simply moved up where the businesses have not changed, that also offers a great opportunity to sell. In fact, I recommended buying on PFC, REC from levels closer to 100. It is a great buy, but right now I see some correction is expected, so I am shorting PFC and REC, a disclosure.
I have recommended this to even my clients and I even have personal positions. So, look at shorting PFC and REC. When it comes to REC, looking at a target of Rs 400 from current price, available in F&O, one can look at shorting REC, with a stop loss of Rs 460, a great risk reward to sell. PFC is also a good sell at current level. I am looking at a target of Rs 370 to initially come on PFC and in futures these are good returns because you get leverage there and keep a tight stop loss of 405 and look at shorting PFC.
So, REC, PFC are clear sells and also look at the last five days. Clearly both Nifty and Bank Nifty have made lower high and lower low formations. Today being the expiry for February, we might be just seeing markets consolidating, but the big selling will come from the new series which can start from tomorrow or from Monday and also tax adjustments should happen for FY23-24 and a lot of selling should come in March.
(You can now subscribe to our ETMarkets WhatsApp channel)
[ad_2]
Source link