At what level can come in the market and in which stocks can get benefit, know the exact opinion on this


Market Outlook: At the end of trading on Friday, the last trading day last week, the BSE index Sensex closed at 61,795 with a gain of 1181 points and the National Stock Exchange’s Nifty closed at 18,349 with a jump of 321 points. After this great boom, now on Monday, good signs are being made for the stock market, about which experts are expressing hope. Kishore Ostwal, CMD of CNI Research has given his opinion on how the market is going to move ahead and has given his estimate on the further outlook of the stock market.

Kishore Ostwal’s opinion on Nifty
Kishore Ostwal says that after touching the level of 18400, the Nifty came down below 18,000 as if all the momentum was over. We see a fall in the market especially when the Nifty has made a high, every time the bears strike full swing and this is no exception. However, there has definitely been no change in our approach. The level of 18400 in Nifty could not be sustained and we can say that there has been a decline of only 200 points. Talking about weekly expiry, there is always something special for option writers. Otherwise option trading will come to an end which can never happen. Market makers can drive Nifty the way they want and take the option premium. There are 120 million investors in the country which is more than any European country and if 50% of them trade in options then the job is done for the market movers. In this market of transactions, if the market movers have to earn, then someone or the other will definitely have to bear the loss.

However, the big question is why the current level has come in the market? Has there been a correction in Dow Jones or because of the fact that the US mid-term elections have taken place. Or for the reason that the media and some selected experts have announced the arrival of capital of $ 20, 25, 500 billion in the market, due to which the boom in the market is being celebrated.

The move in futures and options stocks
As far as the market is concerned, it is said that there is nothing new in it and it cannot be avoided. However, on the basis of this trend, we cannot buy the market at the time of New Year. The movement of future and option stocks is done keeping in mind the option and not depending on the inflow of capital. The flow of capital in the market does not come overnight and it is divided into different sectors (except banking and IT) especially in auto and metals. I am bullish on metals but will wait for 60 days to see clear results.

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market will go to all time high
During this time it was also said that the inflation rate will come down and this has also happened. Due to the 1200 points rise of Dow Jones and SGX Nifty’s level above 18400, all the short selling traders are trapped. Apart from the inflation rate, the US dollar is also falling, which is a positive sign for the overall Indian market and for metals. The market is currently taking a very bullish trend and is ready to go to the level of 21,000. Whatever it may be, but the bears will have a big role in it. This week we have seen that bears with bearish view are doing heavy short selling between 18200 and 18000 and now they will take the market to its all time high.

Micro-cap stocks will benefit
Once the market crosses the all-time high, retail participation will be very high. This will definitely benefit the micro-cap stocks which have shown great results in the recent past. Apart from CNI Space, RDB Chemicals, AMD, Integra Engineering, Inspiresys, MK Exim, Triveni Glass have announced tremendous results. Micro-cap companies have taken time to prove themselves. Those who have proved themselves will soon become smallcaps. Here the above mentioned companies are moving towards becoming smallcap companies.

Some companies are undervalued
Some micro-cap companies are yet to declare healthy profits but their revenues clearly indicate that they are undervalued. You cannot judge a company only on the basis of its profits. Had this been the case, Nykaa’s stock would have been trading at Rs 100 or less. Wherein Jet Airways would have been at Rs 10 or less. The most important parameter for companies is their revenue. For example, Sunil Agro has not shown good profits but its one quarter revenue of Rs 56 crore shows an annual revenue of Rs 225 crore for it. Its current market cap is less than Rs 50 crore, which clearly indicates that the stock is being sold at a huge discount. A big corporate action may appear suddenly in this and then we will realize what I said about the company.

Old stocks have done well
Take a look at my past picks in stocks like Cera Sanitaryware, VIP, Orient Aromatrix, Sandur Manganese, Vishnu Chemicals. You will find that when I had picked these stocks a few years ago, their profits were poor at that time but the revenues were at the same level. All these companies have become midcaps today.

Know about the two best stocks that were picked
I do not need to explain the valuation of Nifty again and again, but if you are a trader, then keep a bullish view on Nifty and keep a buying strategy on the decline. On the other hand, if you are an investor, try to buy value stocks which will give you at least 100% returns and some of these can become multibaggers. In order to enjoy multibagger stock ideas, you need to hold the stocks for at least 3,5 or 7 years. As you can see Shivalik which I had selected at the rate of 16 and now this share has come at the rate of Rs.650 per share. Whereas the share of Vishnu Chemicals which was selected at Rs.70 has now come down to Rs.2000 per share. Actually there are 200 such shares but I am not in the habit of tracking the share price. I realize only when someone from the CNI family of 23000 reminds me about my election.

It is important to know about these four stocks
Metal Coatings, Alpine Housing, Aakar Auto and Artifact are the four companies which are currently trading at 80-90 per cent discount and can surely prove to be 10-20 times multibaggers in the long run. When operators bring down the prices then only you have to leave them behind and only then you will be able to make profits. For example, operators brought down the shares of Aanchal Ispat at only Rs 10 per share and who benefited from this? We had identified this company at a share price of Rs 5 so that it could not harm our balance sheet and now the stock has come close to 52 weeks high. I can definitely say that this stock will grow at least 5 times in the next 12 months.

Effect of reading detailed report of stocks
Read our detailed note on metal coatings where we put together an industry expert’s perspective. According to this, a plant of one lakh tonne cannot be set up for less than $30 lakh. This means that the value of Aanchal Steel and Metal Coatings plants is 300 and 500 crores respectively. Its current market cap is 40 and 70 respectively
crores then where can you lose money in the long run. So if the operators bring down the share price (already done in Aanchal Ispat) then this is a great opportunity to buy these shares. Operators have brought down the Alpine Housing stock from a high of Rs 93 to Rs 61 and this is the best time to buy Alpine Housing as it is in one of the best sectors. The company has a land bank of 90 acres and the company is trading at only 2 to 5 per cent of its intrinsic value.

On the other hand, if you do not want to invest in cash, then switching between techniques should be used.

Disclaimer: The shares mentioned here are the research shares of CNI Research. Be sure to consult your investment advisor before investing. ABPLive.com is not responsible for any kind of loss.

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