BHEL best amongst capital goods stocks

Couple of these capital goods stocks, an L&T, BHEL, Crompton, Macquarie is a bit bullish on all the three and you also have ABB and Siemens where they are recommending a sell.

We like BHEL amongst the capital goods pack and Larsen is looking weak. So it would possibly have a pair trade. You could be long BHEL and short Larsen on an equal value basis. The thing we like BHEL but even BHEL is not giving an absolute breakout on the price charts. It is failing to get past the 2600 levels but yeah, it definitely looks likely to outperform whereas Larsen, it has completed the pullback move from the lows and there should be some weakness you could see in Larsen. So the best way to trade would be long BHEL, short Larsen on value neutral basis.


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