Here's why CA Rudramurthy BV is bullish on ​IRCTC

"In fact, today dip whatever you got in market early morning because of HDFC Bank business update and because of which markets fell, that was again an opportunity to buy and all the dips are getting bought and it is just giving you that very-very small correction to buy," says CA Rudramurthy BV, MD, Vachana Investments.

Let us start with the markets. What is it that you are understanding in terms of the move that we should be expecting for the benchmark indices as well as in terms of the Nifty Bank what are you looking at there?
CA Rudramurthy BV: First of all, on overall index, I feel Bank Nifty is having now that strong support for very short term at around 50,000 level, so positional traders should keep moving their stop loss higher and continue on the long side.

In fact, today dip whatever you got in market early morning because of HDFC Bank business update and because of which markets fell, that was again an opportunity to buy and all the dips are getting bought and it is just giving you that very-very small correction to buy.

But however, overall, one has to understand these are times when you have to keep your leverage in control, have strong risk management as a very short-term trader, be very stock specific and also the result season and budget which is coming in another two to three weeks will hold the key. One has to be cautious on market and very stock specific and levels to watch for Nifty is at around 24,000, 24,200 range and on Bank Nifty it is at around 50,000.
So, be on the long side, be cautious in terms of leverage and risk management and be very stock specific in this market.

What about the pharma sector, any top bets from that vertical?
CA Rudramurthy BV: Definitely, yesterday there were very-very clear signs of pharma just shooting up and that is a clear indication that yes, most of the stocks in pharma can do good. In fact, if you see stocks like Lupin, Sun Pharma, all these are breaking out of their last six-seven years kind of a consolidation and people who have bought them six-seven years back, they are still not even finding their price.

So, for me, the top bet if I have to pick from pharma, it will be first Biocon. In fact, I had recommended this even earlier, but those levels were very-very lower at around 270, 280. But even at current levels or on any dips to 350, 340 Biocon will be a great buy.

One can even look at buying Lupin. Lupin also looks very strong. Yesterday, in fact, it had update from Kotak and a big move with volumes and it has already broken out of that resistance and consolidation of about six months, which was at around 1720.

Now having broken above 1720 with volumes yesterday and even today continuing the up move which it has seen yesterday, this stock still has long legs to go. I would not be surprised to see 2000, 2200 coming very soon on Lupin.
So, my top two bets in pharma will be Biocon and Lupin. And for sure, this as a sector can do very-very good. In fact, metals and pharma will be my two top picks, followed by IT.

What is the word coming in on RVNL. In the last one year from Rs 124 today trading at 450, more than 250% of uptick that we have already seen for RVNL. What are the charts indicating for this one?
CA Rudramurthy BV: See, this stock having made a consolidation and a breakout at levels closer to 270, 280, now nonstop it has moved to these levels of 350.

Even at current price for momentum traders, yes, it is a good buy or you can continue if you already have position. But I will definitely advocate no fresh entry here.

And especially if you are a long-term investor and you had bought it earlier, do a switch from RVNL to something like IRCTC.

IRCTC looks very strong both for a trade as well as a long-term investor can look into IRCTC to buy at current levels.
So, strong support for IRCTC is just at around 980. So, keeping a stop loss of around 980-970 zone, I will be a buyer in IRCTC at current level. I will even switch from RVNL to IRCTC and also especially if you are in PSE or PSU, public sector undertaking or enterprises stock, you have to be very stock specific right now because the move has been very big.

Even if you look at defence as a sector, railways, all these have gone up and they are now trading at a valuation which is as equal to an FMCG valuation and they are trading at five-six times book value, they are trading at PEs of 30-40 times and that you are paying to public sector undertaking.

So, unless you have next five years kind of a horizon and you are buying it today for next five years, I will be definitely very cautious in these areas where valuation comfort is definitely not there and I will switch from place where I do not have valuation comfort to places where I have valuation comfort.

One example which I just mentioned was to switch from RVNL to something like IRCTC right now and overall you have to be very cautious in this PSU-PSE pack.