Tata Motors falling; other auto stocks make new highs: Deepak Mohoni

In an exclusive interview with ET Now, Deepak Mohoni, Director, trendwatchindia.com, talked about auto space. Excerpts:

I want to come to you on the entire auto basket and in particular Tata Motors because post the monthly data, which was fairly mixed, we are seeing some bit of weakness set in?

Yes, indeed. In fact Tata Motors now is behaving a little differently from the rest of the auto pack. If you see what it did in the last rally, which took place last month, it came to about 825 that was well short of its previous peak of about 875-880, so it has actually made a lower top and is now falling. The other stocks like Mahindra, Ashok Leyland, TVS Motors, Bajaj, Hero Honda, they have all made new highs again, so what we have got here is specific Tata Motors weakness and since that top it has also been falling quite heavily, so it in fact does not look like a bad short sale at this time.

What about Bajaj Auto from the two wheeler space? It this time for profit booking now or do you think that probably this particular one amongst the two wheeler stocks like Hero Honda is a better placed stock and you can actually go ahead and be a contrarian buyer?

Actually both these stocks, Bajaj Auto and Hero Honda, once you have them in your portfolio, you should never get rid of them because even when you have severe bear markets, they correct very narrowly, even the 2008 bear market did not hit them. In fact Hero Honda went up during that 2008 bear market, so these are really, as things stand, at least stocks for life. You do not really want to get out of them in your portfolios.