Stocks to watch: ITC, HDFC Bank

It was yet another intensely volatile day. For a change, we managed to close in the green with short covering helping the bulls. The Nifty closed at 4,921 up 57 points, while the Sensex shut shop at 16,587 up 247 points.

“I would not call it a bear market. People need to adjust or get used to the fact that this is not a correction of a 5 or 6 month bullish patch. But this is a correction of a four and half year old bull market, which started in May 2003 and terminated in January 2008. So, the correction or the cut is going to be deep. It’s going to take a long while,” said Bhambwani.

Technical Analyst Vijay Bhambwani of bsplindia.com is positive on ITC and HDFC Bank.

Here’s how Vijay Bhambwani views the stocks on board:

On ITC:
I would remain optimistic on ITC. Its bucking the overall weakness in the markets. As long as it stays above Rs 170-175, on a sustained closing basis, there is a case for an upside headroom till Rs 225 to even Rs 240 in the next 2 or 3 quarters.

On Infosys and TCS:
Infosys and TCS both need to pullback again. Everything else is conducive. They have fallen long enough. They are at the bottom of a bearish channel on the technical charts in the weekly and monthly charts. One could see another 7-10% headroom on the upside in the coming couple of weeks.

On HDFC Bank:
It is head and shoulders above the others. It is a very consistent rising tops and bottoms formation and has a huge amount of support at Rs 1,250-1,260. Currently, it is not very far from there. So, if one was to buy this stock with six-eight month timeframe, it is very easily likely to scale back to more than Rs 1,600 levels.

Disclosures: It is safe to assume that my clients and I may have an investment interest in the stocks/sectors discussed.

Source: Moneycontrol.com

Stay with ITC

Sharmila Joshi of Prabhudas Lilladher is of the view that one can hold ITC with six-months to one-year kind of timeframe.

Joshi told CNBC-TV18, "The first reaction to the outcome of the Budget, one could see volume declines in ITC because one has seen that in all, non-filter and filter cigarettes will now be charged the same amount of excise duty and though it could form a small part of the portfolio of ITC, how its going to affect prices going forward and how they really deal with it possibly by increasing prices but to what extent and for which products and is it going to be across products; that really remains to be seen."

She further added, "ITC is also more than just a cigarette story, a majority of their income and they are leaders in that segment. But its also getting into other lines of business whether its paper, hotels or whole agri initiative, so you have seen increasingly the company growing back profits into the other businesses so that they increasingly start contributing to the bottomline. If the investor has a slightly longer-term outlook, six-months to one-year kind of timeframe, then one could hold on to."

Source: Moneycontrol.com