Trading Idea: Should you stay invested in defensives?

Check out the trading strategies for defensives and other frontline stocks with Anil Manghnani, technical analyst at Modern Shares & Stock Brokers

Check out the trading strategies for defensives and other frontline stocks with Anil Manghnani, technical analyst at Modern Shares & Stock Brokers.

Indian stocks markets have dropped for five consecutive trading sessions on back of overseas investors selling amid worries about the economy and on lingering concerns about political stability.

So is this the right time to switch to defensive sectors such as fast moving consumer goods and pharmaceuticals to offset market losses?

Smart Investor: How would you play the defensive space such as FMCG, pharma pack?

Anil: The problem with defensives is that when the markets dropped significantly, defensives did not crack but every time markets make new lows, the panic selling starts and investors start selling defensives too and some of that has led to decline in ITC and HUL that have fallen below their earlier highs.

This indicates that investors are simply offsetting their loses by selling defensives so till the time we do not see a crack in the sector, it’s okay to stay invested in defensives.

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