Tuesday 7 October 2008

Ignore technology space: Dhawan

Sajiv Dhawan of JV Capital Services is of the view that one should ignore technology space.

Dhawan told CNBC-TV18, "For the tech sector we have been saying ignore till results and that advice remains the same. I am not seeing any reason to go and buy these stocks. Too many people have been trying to play the sector based on the rupee movements and I don’t think that’s been a good strategy. One has to wait as it only a mater of few days now. Even if the stock moves up 5% in the next few days, you would get a clearer picture when the management speaks. It is a relatively transparent company and they would give an honest answer."

He further added, "Reliance has got to be one of the stocks, which are going to lead the market bounce back. It is barometer of sentiment for average retail investor who has it in his portfolio in whatever the quantities. So if I was going to buy, apart from the Nifty, Reliance, SBI, L&T; the stocks which corrected sharply today would be the first stocks I would buyback into after these sharp corrections. But again I would reiterate that don’t be aggressive at the moment. If you are buying the Nifty for a one-year time period, fine, but don’t try and pick Reliance or a stock for a 5% upmove."

"It is just not worth the risk and too many investors have had too much leverage. They have not managed to reduce that leverage and that’s adding to the pain in the markets. One is seeing some margin pressures from a lot of investors who have gone way beyond their limits and their capabilities and when the markets do bounce back, I am afraid a lot of these investors would be left out because they would just have no capital left to come back and trade again when the markets settle, whether that’s six-months or one-year from now."

Source: Moneycontrol

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