The markets have been extremely volatile. The Sensex on Wednesday opened with a negative gap of 250 points at 13,856, and soon touched a low of 13,731.
However, it recovered the lost ground in the closing trading session and is likely to end the day with a comfortable gain.
What strategy should you adopt? Which stocks to buy, sell and hold?
In an hour-long chat on rediff.com on Wednesday, stock market expert Pranav Sanghavi, director, Jitendra Harjivandas Securities (P) Ltd, replied to many such readers' queries. Here is the transcript:
BHARATH SHETTY asked, HI PRANAV L N T IS GOING DOWN FROM 2550 TO 2310 AS ON 25 JUN , what is think of this , will it rise and when ?
PRANAV SANGHAVI answers, at 2008-06-25 15:59:07It may go further down. The scenario is still looking weak. It could rise but not before a correction due to fears of infrstructure spending slowing down. Although the company is pretty confident of maintaining its margins and profitability. It does have a strong balance sheet and a pretty strong order book too.
aea asked, Hi Pranav, first of all i would like to thank you for your helpful advice. How would the recent CRR and repo rate hikes affect the markets. which sectors will present buying opportunities?
PRANAV SANGHAVI answers, It will clean out most of the liquidity in the markets. Money owuld be that much tighter and hopefully for the FM the inflation should come lower. The inflation numbers have gone out of hand.
aea asked, Which stocks should be bought now for 1 year perspective in mind.
PRANAV SANGHAVI answers, I would still wait before I jump in to buy. THe markets still look weak and could fall further. Once the market looks to have bottomed out you could look at stocks like Reliance,. L&T, SBI, IDFC etc.
ks asked, Good Afternoon Pranav, At what levels should one enter Indian Hotels, IDFC and ITC.
PRANAV SANGHAVI answers, I am a fan of all the three stocks and with the recent downturn of the markets all the stocks look attractive to me. But I would still wait a bit before I enter these stocks.
nikki asked, what is your call on SBI, Dena Bank, ICICI and BoB at current level
PRANAV SANGHAVI answers, I think they will fall a bit further on the back of the CRR hike and the expectation of rate hikes by Banks. I think in the short term they will be weak and over say 1 to 2 year outlook you could look at them from lower levels.
kim asked, Hi Pranav, today the markets recovered a bit inspite of the rate hikes. why did that happen? what could happen in the near term?
PRANAV SANGHAVI answers, Any rise in the current scenario should be looked as a short term phenomenon and expect the markets to correct. The markets had expected this step by RBI and it was factored in partially in the index, therefore the markets did not fall and rose.
NILAM asked, WANT TO KNOW ABOUT SHARE MARKET IN DETAIL
PRANAV SANGHAVI answers, I suggest you take up a course offered by the training institutes of BSE and NSE.
Ekta asked, I have 140 shares of DLF at Rs 525. What should I do?
PRANAV SANGHAVI answers, You will have to hold on. They did give a decent performance and yet the stock has got hammered due to the negative outlook towards the Real Estate sector due to the expected rise in therest rates and inflationary worries.
hh asked, DLF , ICICI, RPL ,RNRL, NTPC and Kotak ...your view please
PRANAV SANGHAVI answers, I like all the stocks barring maybe RNRL and Kotak but I would still not look at them right now.
pramod asked, Please suggest to exit or hold NMDC,JP Associates and Sesa goa.Iam holding them since 6 months and making 50% loss.
PRANAV SANGHAVI answers, I would hold on to NMDC an Sesa surely. Sesa has even announced a 1 for 1 bonus.
hetal asked, hello pranav i would like to know that the markets have fallen subsantially however some mutual funds like HDFC top 200 NAV have not fallen at that pace. How thats possible?
PRANAV SANGHAVI answers, There are various reasons. One being the stocks picked by the Fund Manager have not corrected as much as the markets have. Two, they may have taken a negative view early and got out of their profitable positions early before the markets could turn down. THere are various factors. Its the sign of a good Fund Manager is all I can say.
Hari asked, Hi what do you foresee of the market now.
PRANAV SANGHAVI answers, Currently everythign looks negative for the markets. I think in the short term the markets will remain weak. But beyond say 6 months they could move up provided the corporates keep up their profitability.
guna asked, HI PRANAV my portfolio punj lloyd, BHel, Kotak bank and PNB..what are the prospects
PRANAV SANGHAVI answers, I like all the stocks you hold barring Kotak and only because they have an extremely high exposure to the capital markets. But the other stocks I would not panic and sell. I would hold on to good quality stocks.
manojkumar asked, what abt. JP Ass, Praj, sail, R. Power, hold or sale
PRANAV SANGHAVI answers, I like Praj form the stocks you mention. I would hold on surely as it is indirectly linked with alternate fuel manufacturing.
ashish asked, which is the best sector to invest these days?
PRANAV SANGHAVI answers, With the way the crude prices are going up I would bet on alternate fuel stocks.
arora asked, hi! pranav I have been accumulating Cairn in the range of 260-280 and Reliance Petroleum in the range of 160-180 with the investement horizon of 5 years plus. Do you see it as a wise decision?
PRANAV SANGHAVI answers, I like RPL surely with that time horizon. Cairn also is in the right sector as we are an extremely power hungry country.
kulak asked, How to buy mutual funds without paying for the entry load?
PRANAV SANGHAVI answers, There are a few funds on offer without entry loads.
Kapil asked, I hold ZeeNews 500 nos at 78. what are the medium term target
PRANAV SANGHAVI answers, I am not a chartist so cannot give you any price targets, sorry.
saurabh asked, sir, i have 550 gtlinfra @86,200 ttml@56,100 gspl@96,20 mindtree@1000,1000 llyod steel@38, 500 essar steel@52....tell me what to do now as there are very low compared to buy price?
PRANAV SANGHAVI answers, You have got in at extremely high levels. You would have to wait a very long time to see your prices as most of the stocks are trader friendly trading stocks. And they have been hit bad in the current down turn.
champak asked, You have told me to buy L & T at 2700 in your previous chat, Now its 2300 , You are very good at Analysis I think.
PRANAV SANGHAVI answers, As most short sighted investors you are also looking at the stock with a 1 month time frame and in my 16 years in the market never have I recommended a stock with a one month outlook. If you do manage to study it's balance sheet and its recent quarterly results and its order book and consider the bonus issue announced probably you will understand why I recommended it.
sambaiah asked, why L&T,s downfall though bonus declared? is it ok to hold. i have sesa goa & L&T. both declared bonus. can i
hold till i get bonus or sell at good price.
PRANAV SANGHAVI answers, I would still hold on to L&T and Sesa and get the bonus shares. Over a longer term they will give decent returns on a cum bonus basis.
Chnadu asked, HI have 100 PUNJ@297,10 Bhel @1785, 20 PNB@ 530 and 20 Kotak @ 675..please let me know tyhe prospects
PRANAV SANGHAVI answers, You will have to wiat a long while to get decent returns on the stocks. All your picks are at higher levels and it will take more than 6 to 12 months to see decent profits.
gaurav asked, hi Pranav, i have 200 DLF@620, 50 Jindal saw @640 and 50 India Infoline @860, what should i do?
PRANAV SANGHAVI answers, The real estate sector still looks a bit weak in the short term. With worries of a infrastructure slowdown Jindal and DLF could be affected negatively. India Info is a brokerage stock and with the current state of the markets with low volumes market correction the company may not do well for a couple of quarters.
VKS asked, Is it advisable to buy Reliance, L&T, Sesa Goa and SBI now?
PRANAV SANGHAVI answers, I like all the stocks you mention but I would not buy right now. I would wait for some further correction before I look at the stocks. As I had mentioned in my previous chats that markets look weak and I would buy at lower levels only.
riyas asked, Hi pranav, Is it wise to invest into RPL for 1 to 2 years outlook, as the RPL production will start by end of this year.
PRANAV SANGHAVI answers, As the commercial production date nears we could see higher prices in the stock.
Muralikrishnan asked, Pranav, Should one go for Sectoral Heavyweights (like Reliance Ind.) or should we pick scripts that are attractively priced but not A group shares ? Given the current market conditons.
PRANAV SANGHAVI answers, If and when the markets do move upwards it is always the index heavyweights like RIL which move the index up. So with that angle you could look at them. On the other hand one could look at quality B1 stocks which have corrected sharply and are available at attractive PE's.
ranjita asked, Sir I have Spanco Tele 500@245/-Please suggest what to now it is 100/-
PRANAV SANGHAVI answers, Sorry, I do not follow the stocks so I would not be able to help you.
AMAR asked, Hi Pranav, I am holding NTPC@199, L&T @2900, relcap@1300,Jaihyd@53. Is it good to hold them , average them or sell out
PRANAV SANGHAVI answers, I would surely hold on to L&T and NTPC.
ranjita asked, Sir Please explain Stop Loss should Investor use it.
PRANAV SANGHAVI answers, Stop Loss is essentially for a trader. When a person bets on a movement of a stock either upwards or downwards he/she can reduce their losses by entering a price against their bet which if it reaches before the profit then the trade gets squared off automatically. So say you wnated to buy stock A at Rs. 100 and think it will go to Rs. 110 and you will square off but you can afford a loss of only Rs. 5 on the stock if the market goes against you. THen you enter a stop loss at Rs. 95 so if the market moved lower and the price went down to Rs. 90 your loss would be restricted to Rs. 5 as the your trade will get squared off at Rs. 95.
KKA asked, Hi Pranav, any idea where the market is headed to? is it a good time to invest or better to wait? i heard it can go down to 9000 points. Is that true?? Pls advice
PRANAV SANGHAVI answers, In the short term markets still look weak. Markets can move to any levels they are markets after all. No one can predict them But 9,000 levels lookl seriously impossible.
Aditya asked, Pranav, Assuming that economy gets adjusted to Oil and around 6% inflation by December, where do you see sensex after 12 months
PRANAV SANGHAVI answers, I think it would be closer to 20,000.
himangi asked, I have 10 shares of DLF.should i sell or keep it
PRANAV SANGHAVI answers, I would hold on.
JP HYDRO asked, I M HAVING 500 JP HYDRO @65. WHAT TO DO NOW?
PRANAV SANGHAVI answers, I would switch to a quality stock.
sneha asked, I am planning to buy SESA GOA and PRAJ INDUSTRIES. Please let me know the prospects for 2 year horizon?
PRANAV SANGHAVI answers, I like both the stocks and I think both will outperform the market over that time frame.
YSReddy asked, What is the future of DLF, Larsen & Toburo, Jaiprakash Associates and Sobha Developers.
PRANAV SANGHAVI answers, I like L&T the best from the stocks you mention. DLF is af ar better quality real estate player than Shobha Dev.
Zahid asked, I have 40 DLF @700, 40 tata motors @ 700, Kindly let me know the future of the stocks.
PRANAV SANGHAVI answers, If you are in the market for the long term with a 1 to 2 year outlook you will see decent returns on the stocks. In the short term it will take some time to see your prices.
Bhaskar asked, i have 10 shares of Tcs should i sell it or not
PRANAV SANGHAVI answers, In the current scenario the Dollar has appreciated by over 10% agains the Rupee over the last few months. I would hold on to the stock.
Navin asked, Has Aban OFFshore 50@Rs 3200. Have they declared consolidated results (including Sinvest Numbers ) and if yes then what is your outlook on ABAN ???
PRANAV SANGHAVI answers, I still like the stock they are the largest oil exploring company in India. With the demand for drills rising by the hour I think they will only benefit.
Anand asked, Hi. please let me know if its good time to buy? and to buy which.. i have budget of 2lakhs. I already have 500 RELNAT, 500 UCO and 5000 Himachal futurstics.
PRANAV SANGHAVI answers, I would wait for a while before plunging in to such volatile conditions.
satyendra79 asked, Should i buy Ranbaxy at 530 or below. I plan to buy 200 shares.
PRANAV SANGHAVI answers, Let it correct with the market then you could surely look at it but with a 1 to 2 year outlook.
sathi asked, Hi pranav, Iam holding indiabulls finac@465,powergrid@90,rnrl@125,rpower@281 adlabs@650,HDIL@670 and bhel@1370. Kindly let me know which one I can sold it right now or do I need to balance which was went low?
PRANAV SANGHAVI answers, I think you can surely hold on to Power Grid and Bhel from the stocks you have mentioned.
nitinkale asked, I have spice communication @26. what should i do. should i hold or sell?
PRANAV SANGHAVI answers, There is some talk doing the rounds for a acquisition or merger with Spice COmm so I would hold on for a while till the news breaks out.
MohitVijay asked, Hi, I have 150 RNRL Shares @125 Rs., What should I do, Sell or Hold or Averaging is best for me?
PRANAV SANGHAVI answers, As I have been saying in the past RNRL will not go anywhere till the outcome of its ongoing court battle with RIL is settled.
Don asked, Hi Pranav, When do see the market to bounce back? Is there some relief from the coming bad news from time to time in coming days? Where do u see the market at year end?
PRANAV SANGHAVI answers, Till we see the inflation coming down and also the crude prices cooling off I don't see the markets bounce back up quickly.
PRANAV SANGHAVI says, Well its time for me to leave. Thank you and bye for now.
Chat with Pranav every Wednesday, 4 pm
