What is the outlook and is it advisable to buy at these lower levels to reduce the average cost of acquisition?
Kamal Riyaz Sona Koyo (Rs 57): Reduce exposures as the stock is not likely to recover to your entry levels in the near term. The near-term outlook is not positive and a drop to Rs 47-48 levels appears likely. Use a trailing stop-loss in the event of an upward move. Only a close above Rs 70 would reinstate positive outlook. Till such time, it would be advisable to reduce holdings. IDBI (Rs 84.4): Investors need to realise that the strategy of “averaging the cost” by buying at lower levels is not a prudent strategy. There is no point buying a stock that is in a downtrend. It will amount to putting good money after bad. Instead, investors may cut their positions size and wait for a logical entry point when a fresh “buy” signal is generated. As far as IDBI is concerned, it would be advisable to pare exposures as there appears to be no signs of reversal of the ongoing downtrend. We are looking at a drop to Rs 65-70 range. Have a stop-loss at Rs 81 and try to reduce holdings on price upticks
