Sell TCS, Tata Steel, buy banking stocks today: Sanjeev Bhasin

Markets saw a strong bout of profit booking in the second half of trade yesterday. Concerns around subdued advance tax numbers by leading corporates also pressured markets. However, foreign buying continues unabated, helping Indian stocks and rupee outperform globally.

The Federal Open Market Committee (FOMC) in the US is set to announce further reduction in bond buying to $55 billion today. However, market reaction is likely to be muted as the same is already priced in.

Weak guidance by TCS, days after Infosys also put up a similar outlook, may pressure IT stocks, which have run-up in excess of valuations. Over ownership by foreign & local institutional investors is another negative for IT stocks.

The theme today would continue to be long Bank Nifty, short CNX IT as a pair. Buying banks and sell IT stocks should be the strategy for the day. Tata Steel continues to show weakness, while Jindal steel is showing strength: Long Jindal Steel & short Tata Steel is another pair which could make money today.

Trading calls for today:

Longs:

1. Buy Bank Nifty: 12100, stop loss 11887, target 12550

2. Buy Kotak Bank: 765, stop loss 734, target 810

3. Buy PNB: 635, stop loss 614, target 678

4. Buy Jindal Steel: 260, stop loss 245, target 283

Shorts:

1. Sell CNX IT: 9375, stop loss 9490, target 9000

2. Sell TCS: 2125, stop loss 2200, target 1950

3. Sell Wipro: 542, stop loss 562, target 512

4. Sell Tata Steel: 342, stop loss 349, target 324

Investment call:

Buy VIP Industries: 70-75, 3-month target 118 (Why: Dominant player in the Indian travel market & has seen a sharp fall in performance. However, renewed double digit growth guidance by the management with travel & marriage being the key theme for 2014, expect strong quarterly performance).