D-Street mayhem: Stocks and sectors to watch: Ashwani Gujral

Heavyweights are taking huge beating on the bourses, due to which benchmark indices are trading near September 2006 level. Markets are taking cues from global markets, wherein European markets were crushed very badly. Metal, realty, technology, power, telecom, capital goods, oil and pharma stocks are under huge selling pressure.

Technical Analyst Ashwani Gujral feels investors should not short now as it does not make sense. "One will need to go short only if there is a decent bounce back. In the next few days, 3,800 will probably get tested once and that will give one a shorting opportunity. In this market, short positions are so high that any kind of global rate cuts could well take this market 150 points up, so shorting right now is not a good idea. Overall, unless the markets can stay above 4,000, it's a sell on a rally market."

Gujral feels real estate stocks have got beaten too badly to go down anymore. "During the software bull market, IT stocks got beaten up the most. There is hardly any scope for downside on realty stocks, so shorting them here does not make any sense."

So, which stocks can see the most downside from here? Gujral says: "The big boys are the only ones that still have some juice or some meat left. Stocks like Reliance, Larsen & Toubro, BHEL - those holy cows that no one ever touched -are going to get beaten up. The rest, or 80%, of the market is already bashed up enough, so they probably don't have as much downside now as largecaps have. Today, the index is down more because of largecaps. The midcaps are already done and over."

Source: MoneyControl