Book out of metal once it moves up: Ambareesh Baliga, Karvy

ET Now spoke to Ambareesh Baliga, VP, Karvy Stock Broking Ltd., on his views on the metal space.

Considering the kind of price rise as we have been seeing being put into place by most of these metal companies. We had SAIL, Bhushan Steel all putting in price rises and now Tata Steel has come out with the 4% hike in prices. Demand has also been picking up. keeping all this in mind the prospects for the metal space as a whole and your select picks from here?

Clearly the demand is picking up no doubt and normally demand picks up once the monsoon ends and that is just about 2-3 weeks away. So clearly these companies have increased prices and possibly there could be one more round of increases possibly sometime in October.

But again the question is whether the rise is sustainable or not, which after speaking to couple of steel companies, we find that the price rise may not be sustainable because the demand going ahead may not really keep pace with what the market is expecting. So clearly we feel that once the stocks move up, I do not think one should actually be holding on to it and in fact one should be booking out because you may not see these high levels at least in the near future.

You have been maintaining a cautious stance on the markets for a while would you use days like this to date liquidate positions?

Yes, surely to a certain extent I will liquidate at least some trading positions because quite a few of these stocks have given you that 4%, 5%, 8% sort of a return.

So I mean like it would be prudent to book out at least partially although I do not say that tomorrow may not be a good day, tomorrow again could be a good day, so possibly utilise tomorrow also to book partial profits.

So every higher level I think people should be booking out at least fundamentally the market is looking extremely stretched at this point of time so does not really make sense holding on to your positions.