What ET says!!!

Auto:
The valuations in the auto sector stocks have gone up significantly during the last couple of quarters. Those invested in auto stocks at lower levels can book partial profits. However, those looking at taking fresh positions should be careful because the valuations of auto stocks are already stretched. The growth in sales could flatten going forward , and interest rates may also go up in the medium term.

Banking:
Stocks in the banking sector have been through a good rally during the last few weeks. The good results declared by large global banks have brought investor attention back to this sector.
The demand for retail loans picked up during the festival season. Those invested in bank stocks at lower levels can book partial profits.

IT:
The positive developments in the global economic conditions have kept the IT stocks in a bullish mode. These stocks are expected to do well as economic conditions improve in the developed markets. However, investors should track the dollar depreciation (rupee appreciation).
The sharp appreciation of the rupee against the dollar can play spoilsport in these stocks. Investors should go for stocks of large-cap companies that have a wider base and capability to hedge against sharp currency movements.

PSU:
The stocks of public sector units (PSUs) have come into the limelight due to talks of disinvestment in these companies. The government is also talking about the merger of some public sector banks. Investors should do their homework before taking any investment decisions.
The proposed disinvestment is not going to change anything from the control perspective of these PSUs and the money collected as part of this disinvestment will go mostly to the government.

Real-Estate:
The situation has definitely improved for companies in the real estate sector.
However, the stocks in this sector have shown high volatility due to their being sensitive to macroeconomic data on the global and domestic fronts.
There are many factors that directly or indirectly influence the movements in stocks of this sector.
Some of the main factors include data related to consumer confidence, raw material prices, job market data, interest rate data etc.
Investors with a longterm horizon can look at accumulating real estate stocks in correction phases.

Telecom:
The entry of new global players into the domestic telecom space has triggered a new tariff war.
The pricing pressure is quite visible in the recent results of leading telecom companies.
Although this is one of the fastest-growing mobile markets in the world with a huge potential for growth, investors should take a cautious approach on fresh positions in telecom stocks till the pricing war gets stabilised.
Investors with a longterm horizon and having telecom stocks in their portfolio should hold on to their positions, and look at averaging out at lower levels.

"....The greatest discovery of my generation is that a human being can alter his life by altering his attitudes of mind...."

Questions you should ask before buying/selling in a market...

- Is the stock amongst the high beta stocks (check volatility)
- Is the stock sensitive to change in interest rates and which way are the interest rates headed?
- How well is the sector (to which the stock belongs) performing?
- Has the stock shown some resistance in the face of a sharp rally or a sharp fall?
- How good is the management of the company? Does it instill confidence?
- How has been the performance of the company in the last 3 - 5 year period?
- Are MFs buying or selling the stock? Whether the better performing MFs holding this stock in their portfolio?
- Is the P/E ratio in a reasonable range?
- How good is the growth prospect of the sector to which the company belongs?
- What is the profit/loss % in the stock from which you want to exit? If profit is significant or loss is minimal, then you can think about exiting from the stock.

"....The greatest discovery of my generation is that a human being can alter his life by altering his attitudes of mind...."