A build up of long positions is likely on expectations of favourable policy announcements in the budget. We can expect the Sensex to put on around 800 more points before the budget. There however would be some pressure on the bourses post budget on account of profit booking and squaring of long positions by investors. There has been some strain on the operating margins of auto companies due to higher metal prices but a likely excise relief to the sector might compensate this. Mahindra and Mahindra looks good on technicals and should cross the Rs.1000 mark in a couple of sessions. Indian Hotels is another stock that’s looking really good.
Prior budget, we can see a Rs.60 to 70 appreciation in Blue Star and a round about Rs.100 appreciation in Tata Elxsi. There are also talks in the market about Anil Ambani buying a stake in Satyam from group chairman Ramlinga Raju. The stock’s already shot up quite a bit and it would notch up further gains if something actually materializes on this front.