Look For Under-Tapped Opportunities In A Heated Market, Say Analysts
In a booming market where equities have run up to great highs, it is opportune for investors to look for under-tapped stocks to chase returns and either book profit on existing positions or stay put, according to Vijay Chopra of Enoch Ventures Pvt.
"One should get out of high beta stocks and look for opportunities elsewhere. There are (opportunities in) stocks from PSU (public sector undertakings), oil and gas, insurance," Chopra, the managing director and chief executive officer at Enoch Ventures, told NDTV Profit. "Get out of high beta, get into low beta, and be cautious."
He said stocks like Mazagon Dock Shipbuilders Ltd., Garden Reach Shipbuilders Engineers Ltd. and other defence stocks have already run up; while consumption theme picks like Hindustan Unilever Ltd., Nestle India Ltd., ITC Ltd.; and PSU banks like Bank of Baroda and Bank of India give good entry room.
Kush Bohra, founder of Kushbohra.com, concurred with Chopra, and said Mazagon, GRSE and Cochin Shipyard are approaching overheated territory and the risk-reward ratio is not favourable. On the other hand, the rally in Bharat Electronics Ltd., Hindustan Aeronautics Ltd. and Bharat Dynamics Ltd. hasn't been as sharp.
"I think you should book profits in Mazagon and Cochin and get into BEL or BDL. They are some distance from overheating territory," he said.
On the benchmark index, Bohra said he will not initiate a fresh short position on the Nifty, but sees a put base near 24,000-24,200 mark. In Bank Nifty, he said the gauge is starting to show negative divergence. "Both the indices are on a wait-and-watch list. It's tricky for the Bank Nifty to move higher."
Benchmark equity indices extended their record rally for the second consecutive session, but ended little changed on Thursday as gains in information technology shares were offset by losses in HDFC Bank Ltd.
The NSE Nifty 50 ended 0.06% up at 24,302.15, while the S&P BSE Sensex rose 0.08% to 80,049.67, closing above the 80,000-mark for the first time.
Watch the full conversation here:
The views and opinions expressed by the investment advisers on NDTV Profit are of their own and not of NDTV Profit. NDTV Profit advises users to consult with their own financial or investment adviser before taking any investment decision.
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