New Delhi: With markets looking weak in the short run analysts feel one can buy stocks like Infosys, TCS, Satyam, Reliance, RCoVL and Zee Telefilms as good bets.
They also believe that traders should stay away from the markets or buy weakness and sell the strength.
Ambareesh Baliga, Karvy Stock Broking
Better for traders to stay out of the markets
In such a market it's better for traders to stay out of the markets. Because the only way to trade in this market is to go short but looking at the weak volumes it will be dangerous to do so. Any small amount of buying can push the markets up and may trap these short sellers.
Oil and pure real estate stocks look weak
On the weaker side oil stocks are still looking decently weak and we are not positive on pure play real estate stocks.
One can pick up good IT stocks for the longer term
Other IT stocks could also beat street expectations but not to the tune of what Infosys reported. It will be a bit difficult for others to beat the street expectations as much as Infosys did. At the same time, post Infosys' results the expectations have also started moving up.
Hence, one should not start buying IT stocks immediately on account of earnings expectations for Q1FY07. One can, however, pick up good IT stocks for the longer term.
Vijay Bhambwani, Technical analyst
Banking stocks are looking pretty weak
Banking stocks are looking pretty weak and one can sell them on advances. On the other hand, at this point in time, technology as a sector is looking okay but it is likely to be driven by results. I would rather go with Infosys at this point in time.
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Sumeet Rohra, Antique Stock Broking
Software continues to lead the winning pack
Software continues to lead the winning pack especially after the Infosys numbers. If one could get more positive cues from Satyam, TCS and Wipro then this sector will outperform the broader markets.
Other software biggies can also beat street expectations
Even the other software biggies can beat the street expectations as the environment for software sector looks positive. If a company of Infosys’ magnitude guides this aggressively, it indicates quite a bit of action in this sector.
Top picks in the IT sector
Top picks in this space would be Satyam and TCS, Infosys, too, is a good stock to hold in one’s portfolio.
Buy selective mid caps like Zee; RCoVL and Reliance
Selectively, mid cap stocks can also be looked at. Zee Telefilms stands out particulary because of the demerger benefits and increasing market share of its bouquet of channels.
RCoVL also looks good at lower levels. Even Reliance near Rs 1040 levels doesn’t look like a bad bet.
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Best bet would be to buy weakness and sell the strength
Traders can have a view-based trade next week. The best bet would be to buy weakness and sell the strength. One could sell between 10960 and 11051 and buy again at lower levels of 10500 with a stop loss of 10440.
S Naganath of DSP Merrill Lynch
Technology, FMCG, Engg sectors to do well
In general, we have been pleased with the results that we have seen so far. We do expect technology to continue to do well.
In our portfolio, we have a significant weightage for technology. We are also quite optimistic on the FMCG sector and also on engineering; although the stock price performance has been quite poor lately.
We still think that these sectors will continue to do well in terms of business momentum.
Manish Chokhani of ENAM Securities
Results this quarter across the board not too great
It is quite possible to expect disappointment in results across sectors.
Therefore, one is seeing some of them already trying to push through price increase as well. While one has just started to see the beginning of that, it will manifest towards Q2 and Q3 of this year, that one would start seeing some margin pressures if things do slow down a bit.
That is when people will not be so keen to put price increase through and rather keep their volume up.
I do not think this quarter's results will give us any particular reason to get either very alarmed or excited. Even for Infosys Technologies, the operating margins were lower than what the street was expecting.
From a margin perspective, things were not so great for all the results that we have seen.
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