Most of the analysts are expecting the IT sector to bounce back in the short-term as the sector seems a bit too badly bruised in the short-run. Also, the rupee appreciation phenomenon has also not taken a respite for quite some while now.
In short, can we expect a short bounce-back of rupee (read: IT) after witnessing a one-way journey on upwards. Yes... agreed, the prospects of Indian economy remains robust & there is no way that we can stop rupee from appreciating in the longer-term duration. But, what i am stressing over here is a short-term reversal in rupee against the US dollar.
On the other hand, we also see chances of further dollar depreciation if the US fed cuts rates in the upcoming Mid-Dec meeting. So, that is again a question mark over the view mentioned in this post on the short-term rupee reversal.
Pls reply with your view & oblige !!
Last edited by BULLS : 1st December 2007 at 08:51 PM.
Hi Dear, Alchemist will tell u details about IT, but as far as I go, as i have already said, i still feel that one can make profit in IT from current levels. As i kept on buying at all declines, my IT portfolio is in black from deep red and i am making good profit and i hope it will go more. But yes u can find more better opportunities in this bull market which can give u better returns. Rest Alchemist will be able to tell u in more detail.
But, somewhere i am getting a contrary feeling that if US Fed cuts rates consequently leading to further weakening of US Dollar, that may again be a hit to IT companies.
Also, regarding your IT portfolio tuning black from red, may be a good sign as of now in short-term & even in near-future we may expect a bounce back. But, the point to ponder upon is how much GREEN these stocks can turn into from the black. Already they're big under-performers. I also believe that we're to witness much more appreciation of Rupee in the longer-term even from current levels.
One more threat is that going fwd if & when the US economy slips into recession (at worst) or slowdown (at best), the dollar is much likely to fall & that there would be direct co-relation to the hit to IT companies in terms of US company spends towards IT budget. Though, some feel that IT companies may stand to benefit from more allocation of budget from US companies to cut costs by better IT allocation for smarter savings.
The long-term view to me seems that the IT may have bottomed-out, but now it may either consolidate around this area or may give returns that would be much lower to over-all market-indices (i.e.; under-performers). They may give modest returns at best over longer period; unless we see some innovation from these IT companies or a bit diversification from just Pure-IT companies.
Awaiting your reply for further healthy discussion.
Last edited by BULLS : 3rd December 2007 at 11:30 AM.
Yes u r right buddy. I am residing in Canada and i was looking for different views on recovery to US economy. All differ by 100%. Some major analysts says that worst is over, some says it is yet to come. If they have not made up their mind yet how can we. There are other strong sectors to watch for (that i have requested Alchemist to guide me for in other thread in which u also have give valuable contribution). So u can invest in other sectors, as far i am concerned, i started buying infosys at 2100 and TCS at 1120, so i was deep in red, so what i did was started collected these stocks at every major decline and in more quantity, (u must have extra cash for that). So my advise will be to go in other sectors whose future we can predict with ease. And a golden rule that i followed my life - Invest in stocks only that amount which if lost will not affect your daily living, u can live ur life perfectly fine even if ur portfolio becomes Zero. Rest depends upon you dear.
Just to say a few things about your idea of balancing the bought price by buying more shares at every decline and in more amount. Dont you think by such strategy we are making the same mistake again? I mean we are again investing money in a sector which has performed bad and we have invested more amount! Why? Just to bring down the average buying price? If this is true I think it would have been better to invest in some other good performing sector to get some profits rather than investing in same sector to average out buying price.
Yes u r right, but IT is not the bad sector. Is going down mainly due to dollar slide, as such sector is not bad, not before and not even today, that's why i kept on accumulating shares. I made investments in other sectors too that gave me good returns, but all the time i was hopeful of dollar coming back. I got very much disappointed when it dollar was 90 cents to canadian dollar, but then it is equal now. And as i have been watching CNBCTV18 through idesitv.com, many analysts are recommended IT biggies, so i thought it will be prudent to cover my loss as there was chance of revival. Luckily i was right, buttttttt what IF (the big IF) and yes u r perfectly right on that. So try this only if u have extra cash, sector is good and chances of recovery are in near future and yes u can invest that for long term. I am not an expert on this, but this is how i think. If u have some ideas pls share. thx.
You are right but partly. Dont you think that value investing should have a time frame. I mean you should have said IT stocks will be around this level in next 20 months. Just investing in under valued stocks without a time frame is not a good investment. What if the time frame extends to such a period where we loose out the time value of money. I mean if IT stocks are to come back after say 2 years then its better to invest in them after 10-14 months. Not now!
Yes i understand its very difficult to judge this time frame - and this is what an intelligent investor must try to do
I dont agree with u, it depends upon stock to stock. Some stocks are good and even if they r down for long term when they rise, they outsmart all (i am not a daily trader, i dont have means to track market daily here in Canada). I bought lReliance and Bajaj when they were near 200-300 6-7 years back, they went down from 700-800, i knew they r good companies and they have to rise, when no body knew, I sold them last month only.
May be i was wrong with my IT decision, but i am happy with it, and this is what matters, u should be satisfied with ur decision, dont matter u make less money or more.
It may not be a good strategy for lot of guys as they r in touch with market daily and knows what is happending in india, so r more aware, for me i find a good company and keep it for long term. As far as trading goes, i watch CNBC TV18 on my net and buy what broker recommends.
Thanks for this forum that i found, now i invest sometimes only for a day or two and make some money.
I really appreciate the knowledge that all of u share in this forum, now i am more aware of the market.
It depends upon person to person what strategy suits him, one strategy good for one may not work for other and vice versa, so grab knowledge and use it as it suits u.
I think you sound pretty fair on your side. Investment returns are matter of personal greed which differs from person to person. What you said is correct, nothing wrong in it. I was just trying to make it better by analyzing the time to enter a particular stock. Ofcourse I strongly advise long term investments, but according to me the time to enter a stock is very very important. And my earlier post was about judging a perfect time to enter rather than long term,short term or anything else. Thanks anyways for your valuable inputs. Have a nice day. I have my cousin in canada, torronto . Enjoy.
The question that u want to answer is a MILLION dollar one. If one knows when to enter market and when to exit that would be awesome. Yes by reading, getting advice, etc you can to some extend guess how the market will behave, but from my past experience i have gained that u can predict market but which share will move and which will not is hard to guess. The winner of yesterday turns out to be a loser of today.
But yes by pooling in ur ideas u get more information to predict the unpredictable to some extent.
What are chances of IT companies. Is the bottom made for these shares. Is this buying signal? Infosys results are also due on 11 April 2008?
I don't think the dollar will get much stronger from the current levels.
It has been held steady against the INR by RBI, but I don't think that is the long term solution.
The US dollar made a new low against the Euro last week and if news flow remains negative, another low will be made this week.
For IT companies, more than the rupee, the state of US economy is the bigger issue.
Unless we get some positive indications from the US, IT stocks will continue to be under pressure.
If Infosys comes out with a good guidance the stock may move up, but I don't see much chances of the stock going beyond 1700-1800.
The short-term trend of most IT stocks will be determined by Infosys' guidance.
The IT indices have support at 3225 (BSE IT Sector) and 3405 (NSE CNX IT). If someone wants to trade the IT stocks, he can take a position at these support levels.
I usually don't like to take positions before the results, and thus will avoid IT stocks for now.
(Currently, I don't see any signs of a trend reversal on the charts).
IT Sector Stocks Will Bounce Back?
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