Blind buys - MC

Jaiprakash Sinha of Kotak PCG said, "We have suggested our investors to be with Reliance Industries, ONGC, GAIL within the oil and energy pack. However, we have recommended them to stay away from others in this pack at this point in time.Some of his blind picks in this market include heavyweights such as SBI, ICICI Bank, M&M, Infosys, and ACC. “However, the caution is not more than 20% at this point,” he said.Sinha is also positive on sugar stocks since the fundamentals of this sector are still intact.

Technical analyst Ashwani Gujral, however, advises caution to investors and recommends staying away from the banking pack. He told CNBC-TV18, “Banks were weak even before the bear market started. In a rising rate situation, banks will go to lower levels.”

He believes that there is still some downside left in the banking stocks.

“ICICI Bank could go to Rs 380 levels. PNB could go as low as Rs 300. So there is no point talking about levels in such kind of market because everything is getting painted with the same kind of brush.

You just need to wait for the market to stop falling, get above at least the 200-day moving average. After that one can buy a bit because one could easily go down another 1,000 points with the valuations getting more and more attractive and one will end up losing money if they invest at these levels.”

Mehraboon Irani of Darashaw and Company is yet another proponent of buying into frontline stocks during the ongoing correction. However, he is not so gung-ho on the midcap space. Says he: In the frontline, I would still look at picks like ACC, L&T, BHEL, Reliance Industries, and Tata Power, which are ultimately expected to rally, because when the market bottoms out and goes up, it is the frontline story which moves up. Over the next three-six months, midcaps will give maximum returns to investors. For the next 1,000 points, I do not see midcaps performing.

That does not, however, keep Irani away from the midcap space. He has identified at least 35 companies with a PE multiple of less than 5. According to him stocks like Indo Asian Fusegear, Hyderabad Industries, Hotel Leela Venture, Birla Corporation, Apar Industries, Aban Loyd Chiles Offshores, Bharat Bijlee are going at valuations of 6-8 times their 2006-07 earnings.
Sharmila Joshi of Asit C Mehta says that investors need to keep a cool head and look at stocks that were missed on the way up and invest partially. Her picks during the correction are a mixed bag comprising stocks in the capital good and construction space and cement sector.
“I think one can look at L&T, BHEL at this level among the frontline stocks. Among secondline stocks, Punj Lloyd and Pratibha Industries in capital good and construction space; in cements it would be ACC, Gujarat Ambuja Cements, and India Cements from the midcap sector.”