Buy select stocks in IT, shipping, pharma in bear market

There is no place to hide for the bulls since the weak global cues sent the indices tumbling yet again. Nifty closed at 3,861 down 178 points, while the Sensex shut shop at 12,676 down 654 points.


Mehraboon Irani, Centrum Broking feels investors should look to buy when there is blood on the streets. "If a new investor wants to enter, I won't stop him. There are always opportunities in every crisis, but there are not many stocks in this market that look really appealing. There are hardly six to seven companies which are right now on our buy list. Investors could invest in defensive sectors like IT, in one or two stocks in the shipping sector, and quite a few in the pharmaceutical sector where present valuations look very interesting."


Rajat Bose of feels that if the Nifty future were to hold about 3,815-3,810 kind of range, then even if 3,848 for the spot was broken temporarily, there could be a bounce back.


"But suppose 3,810 for the Nifty July future gets broken then 3,790 or even 3,748 could be in store. Going forward, one may see 3,640-3,605 kind of range. So, that would be a strong support area and would be a real test for the long-term bull market. We have seen that 3,850 was taken to be a support level that would hold. But since that did not hold, we saw a spate of selling. This is a damaging sign and even Dow futures is trading down. So, people actually took the last minute opportunity to create a short position expecting further downside. Wven if international cues are bad one might see a support of 3,748 early morning tomorrow."


Sanjeev Agarwal, Head-Equities, Globe Capital Market, feels that the Nifty had made a very strong support at 3,850. It is trading in an upward slanting channel which started from 3,850 and had gone to 4,200, he added. "This may be a bear market rally but it is going to be very volatile."


 The best case scenario would be around 4,600 and in the worst case it may remain somewhere around 4,200-4,400, he stated. "If we are able to close below 3,850, we may see somewhere around 3,600-3,650 in the next few days."