Market Outlook- Unwind long futures positions

As advised y'day,short term traders(those in futures) should start unwinding long positions(above 5250) with last stop for longs at 5050.Make sure that you preserve your profits.

Fresh longs have to built once we see resumption of upward momentum(may be a strong close above 5230-50). Those who are aggressive can even go short keeping stops above 5220-5230 for targets of 5050.

Medium term investors(those with cash) can add around 5050 but buy these dips with extreme caution (I'd recommend a 20-25% deployment).

Stick to IT,construction,Pharma, oil and gas. Infact with rupee hitting fresh lows against dollar, the outlook for IT stocks has improved. My favourites remain Wipro, Infy in large caps and may be a Rolta/Mindtree/Onmobile in mid caps.

In pharma- Stick to Glenmark and Sun Pharma

In oil and gas- RPL and RIL shall be enough. Cairn also looks decent with a good base at 230.

In construction- JP associates is better and now has good supports at 265-270.

In banking- the stocks are failing to break out(except may be an odd Axis Bank/HDFC Bank). So one should not be overweight on this sector.

In midcaps- I am seeing a renewed interest again in Education space- Everonn,Core Projects, Educomp. Educomp remains my favourite.So better stick to it. The stock has good support at 3500 levels.

Other midcaps I like are -Jain irrigation and Gujarat NRE coke. Even Sesa Goa can be considered but we need to find a good entry point as stock is volatile.

Avoid Cement,Telecom and Auto.Also avoid real estate sector. Infact use the bounce in real estate sector to get out.

In FMCG- ITC is a good bet and the stock can reach 250 levels.

Avoid Reliance Energy and stick to Tata Power(1250 is a good support). Infact REC is the new star in this category. Short term traders can keep an eye on this stock.Once 126 gets taken out on this, this can zoom. So good for short term momentum trading.

In steel watch Tata Steel- it shall pick momentum if it is able to cross 850-860.This is a good medium term bet as it is regaining strength.

For those who want to go SHORT- consider Suzlon (with stop around 300)

Run concentrated portfolios (15-20 stocks max), so that you can make quick exits when required.In this market constantly book profits(whenever you see 5%+) and don't hesitate to get out immediately if the stock reverses.
Short term traders should limit this number to 10.

- SageCapital

Cairn up by 7.6% today.

I feel this year IT, Pharma and Oil stocks are going to outperform Nifty.