Consider this. While the Sensex lost only 2.77 per cent between July 19 and July 26, Bharat Heavy Electricals shed more than 20 per cent from Rs 349 to Rs 279. The corresponding level of Sensex was Rs 4757 and 4625 respectively. L&T, another cyclical favourite, has fallen by 9.46 per cent to Rs 335.

"There has been an across-the-board profit-booking in cyclicals, with both FIIs and domestic institutions, along with speculators selling these stocks. Some investments have again starting flowing in these stocks at current levels," said a market participant. The flare-up at the cyclical counters had flummoxed the markets as the theory of an impending economic revival gathered momentum and cyclical countersgalloped to dizzy heights. "These stocks were going for a song at one point of time, but once buying started, their valuations increased dramatically. However, the quarter one results were not up to the market's expectations and were no where reflective in the price being commanded by these scrips. The market has broken through the resistance of 4660 and could go down further to 4550, pulling these stocks further down,'' said Rajiv Sampat, director, Parag Parikh Financial Services. ``Cyclicals have to be available for value. They appreciated very sharply and need some correction. I would wait for further correction though some stocks look attractive now,'' added Deven R Choksey at Kisan Ratilal Choksey.

Portfolio managers recommend that investors should stick to the number one or two companies in a particular industry while picking cyclical stocks. ``We recommend a buy at current levels in cyclicals but stick to number one or two like Hindalco in aluminium and Reliance in petrochemicals. Results in thefirst quarter were disappointing relative to the market expectations.

However, the companies realised volume growth which is a healthy sign. There is normally a time lag of one quarter between growth in topline and bottomline. In the second quarter, we expect a much better bottomline on a marginally lower volume owing to elections,'' said Ketan Desai at Asit C Mehta Invest Intermediaries.

"There could be a slight further correction, though investors can enter at current levels. If a further fall takes place, they can buy at lower levels and average out their returns,'' pointed out Ambareesh Baliga at Kotak Securities.