cement stocks to buy: Cement sector top bet; 2 stocks to buy now: Rahul Sharma

Benchmark indices are hitting new highs everyday. How sustainable do you think this will be and where do you see the markets headed, is consolidation on the cards expected?

We are closely tracking the options market. On Wednesday, the options market was slightly overheated as the put call ratio jumped to 1.55 and after the mini correction seen in today’s intraday trade it jumped back to its average levels.

I am not overly optimistic for options data. FIIs have been heavily long, so, the best thing is to keep booking profits at regular intervals and keep tight stop losses in place. I think a correction from these levels would be a welcome change as it will attract more money into the market and make the structure more robust for further highs.

I suggest going after stocks with good risk rewards. The index may not be a big money-making trade as far as longs are concerned. It may consolidate or cool off a bit from these levels and post that, a re-entry is expected. We will focus more on stocks and on the index front we will wait for a bit of correction or time consolidation to come into picture.

What are your top bets when it comes to individual recommendations?

We are focused on cement stocks, this pack looked vibrant in today’s session. Even yesterday we saw good volumes of it.

Ambuja Cement remains our top pick on the long side. According to me, this stock has got long legs. During the first leg of the move the stock did really well, it started from 400 odd levels to 550 odd. The second leg of the rally should advance from there. For a short-term we expect a target of Rs 625 to Rs 650 on the upside from the stock and with stop loss of 540.

Another pick from the same sector,

is on the verge of a big breakout which can take place above 1,820. I think the way markets are, the breakout can be pre-empted. The stock can be bought at these levels for an upside of 10% to 12% from current levels. A target of 1900 on the upside is expected in the very short term with the stop loss at 1720.

Both the stocks can be bought. The cement sector should show outperformance after a bit of consolidation that we saw in the last couple of weeks.

I would like to ask you about the IT sector. Is the worst over as LTTS is 8% higher, Persistent 6% higher; is it out of the woods, can we say that?
Yes, we can. The IT sector’s worst was over in September end and now the sector has started to roll.

remains our top pick in the IT pack. LTTS has given a breakout today and more upside is coming.

The sector is now in that catch up zone. The IT index two days back, was down around 17% from the last year October highs. This catch up translates into a big move for the IT index. There is around 10-15% upside on the IT index and midcap stocks can actually be 2 times of the broader IT index. The views are positive towards the sector. It should be bought on every dip also it has a good upside.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)