Time to Accumulate Begins

Markets have corrected a decent bit. Certain sectors look attractive with a few cautions whcih can be tied down with hedged buying in other sectors.

For eg.

IT Sector Frontlines are at good levels, if rupee does not appreciate further. So, Big 4(TCS, WIPRO, INFY, SATYAMCOMP) are Accumulate.
But what if rupee appreciates?
Well, lock in the Accumulation with complementary accumulation in Oil Segment(GAIL, HPCL, IOC, ONGC).

Both sectors combined give an awesome risk return profile(Rupee Appreciation helps Import Driven Oil Sector, Depreciation Helps S/W, both are at rock bottom prices now, with current exchange rate).

BUY, SELL, ACCUMULATE? WHAT?

The Growth Story is Strong. The High P/E is not. Markets rebound today as expected, on back of strong performance by US markets on Friday and East Asian Markets today morning.

But somehow, not very comfortable with the market levels:

1. Political Turmoil in India
2. Core issue in sub-prime not addressed, only temporary relief in terms of Interest Rate Cut by Fed
3. Chances of Interest Rate Hike in Yen.

Hmm....
Definitely not a buy mode, preferably Accumulate, or stay with your hands in your pockets. Long term investors need not sell.

But wait... atleast till August 23, that will decide which way the market tide with turn.

Pick for Accumulation:
JP Hydro, Reliance Energy(Energy Pack to benefit from mega projects)
SBI(Strong Fundamentals, FPO, Subsidiary Amalgamation, low cost of funds)
ONGC(Fundamentally undervalued, strong growth in Subsidiary, growing international presence, government interference to stop retail OVL gas stations/petrol pumps has acted as a boon in disguise)

Sell on Rises:

Cut in Fed interest rates has made IT unprofitable.Cut exposure by around 1/3rd of your holding.
(Exception: TCS(diversified), Sasken(taken quite a beating already).