Monday 3 November 2008

Buy IDFC says Pillai

Neppolian Pillai of Modern Shares & Stock Brokers is of the view that in the banking space, Infrastructure Development Finance Company, IDFC looks good and one can buy it at lower levels for the target of Rs 69-77.

Pillai told CNBC-TV18, "When we came in the month of July and where arguing for a rally to emerge from the bottom of 12,500, at that time the capital goods and the banking sector was two pillars, we were basing the theory on and it worked out fine, but after that the capital goods have already collapsed the charts are both comparative and the price charts."

He further added, "In the banking, the comparative charts that is, the Bankex, the Sensex that still is holding above the uptrend line but the price chart, the pure Bankex chart has gone below its 5-year uptrend and it has closed below last month. That means the momentum upside on the banking stocks will eventually fizzle out at some point of time and that will be the last sector standing up which will collapse in the next downtrend in the market. So obviously in this rally, I wouldn’t touch banking side on the buy side but maybe if I am already long, I will gradually reduce position as and when this interest rate cuts come and because of that these stocks rally."

"I would surely like to sell into banking stocks maybe from a stock pick kind of a view, again with the caveat that whatever stock I am going to mention today will be purely for trading not for investment. IDFC within the sector looks good maybe if one can buy in the region of about Rs 58 to about Rs 45, then one should get a target of Rs 69-77 trade that for a 20% kind of a thing and leave the stock at a higher level."

Source: Moneycontrol

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DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.