Siddharth Bhamre of Angel Broking advised going short on HCL Technologies. He expects the stock to go down to Rs 685.
Bhamre told CNBC-TV18, “These days IT sector is considered as defensive sector and we have seen how Infosys, Tata Consultancy Services (TCS) have gone up with good volumes in cash market as well as formation of long positions. However, same was not observed in HCL Technologies.”
He further said, “At the same time, when big guns are talking about spending cut in US, one cannot expect the outlook for IT to remain positive. As I talk to my analyst, the last quarter numbers -- maybe one-off -- came as a positive surprise. So, I believe in this opportunity of a rise, you need to identify stocks where the upmove is not because of strength.”
“Look at the volumes in HCL Technologies' cash market. There were hardly any volumes and not many long positions formed. So, I believe this is a good shorting opportunity for this stock at rise between Rs 735 and Rs 740. You fix a stop loss around Rs 758-761 and I am expecting around Rs 685 on the downside. So HCL Technologies can be shorted but same cannot be said for TCS and Infosys. So be selective in shorting IT,” Bhamre added.