Don’t buy on dips, stay cautious: Sajiv Dhawan

It was another day of weakness on Dalal Street. The indices were bogged down by stocks in IT, realty, and banking getting battered and finally closing near the day's lows. The Nifty closed at 4,127 down 96 points, while the Sensex shut shop at 13,570 down 425 points.

Sajiv Dhawan of JV Capital Services said this is not time to be aggressive and start buying the index as a contrarian call. "You need to see where this market is going to breakout. That means at least a 100-150 points on the upside. There is no point trying to trade the Nifty for just 20-30 points, that’s too tricky for most traders at the moment."
He feels investors should remain cautious and sit on the sidelines rather than buying this dip. "We have been advising clients for the last several weeks that 4,500-4,600 was the cap for the market, there is no reason for it to go above that. We had that good bounce back to 4,300, but have seen a lack of follow-up buying. The markets are still very concerned because the situation in the US is very fluid. It’s very difficult to call whether it’s going to hit 4,300 or 3,800 first. But any investor who comes in at 3,800-4,000 levels can hold on for three-six months and will see decent upsides. But timing in short-term is very tricky."

Source: MoneyControl