‘Profit or loss in a position is determined by an exit, not by an entry’
Keeping the above words of wisdom in mind, we are giving out the following strategy:
As you are all aware, the markets have run up to great heights since the past two months. We expect the bullishness to continue. There are certain sectors those have participated in the rally and those who have not. For the bullishness to continue further, we expect a sector‐wise rotation to happen. Hence, we are generating a SELL call on certain over‐heated stocks in the sectors, which have run up the most.
Sensex and Sectors – YTD (2014) Gains Simplified…
It is clear from the above graph that the cement sector has run up the most, with almost 21% gains YTD, while services, capital goods, auto, and oil & gas have gained between 10 to 13% compared with the Sensex, which has only given 5% returns YTD.
The environment is very volatile given the election scenario. After this list, we will also publish a list of the stocks that are on the threshold and on the rally after the new parliament passes the Union Budget for FY14‐15. With all these interesting events lined up, we expect volatility to increase. As per seasonality and sector‐rotation as well, we should keep some cash ready to take advantage of situations arising from time to time.
While acting on these SELL recommendations, we suggest book only 20‐40% of your holdings. Rest, we will hold. We are also finalizing stocks that could be bought into, regarding which we would intimate you shortly.
Open Investment Account with us to know the list of stocks that we intend to sell off partially from our suggested portfolio.
Retail Research Desk
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.