The recent rally in IT stocks may not yet signal a sustained recovery, but adopting a blanket strategy of selling on every rise could also be premature, according to Rajesh Kothari, managing director and founder of AlfAccurate Advisors.
While Kothari said that the gains were encouraging, he cautioned investors against assuming that the sector was on the path to a sustained turnaround.
On the broader market outlook, he said the outcome of the US midterm elections could act as a catalyst for markets. However, it was unlikely to trigger a sustained rally on its own or lead to a sharp decline in crude oil prices.
"I would look for confirmation from oil supply conditions, the dollar, bond yields and corporate earnings before changing portfolio positioning," Kothari said in an interview with Moneycontrol.
Even after the Q2FY27 earnings announcements, do you believe the upside potential for IT stocks remains uncertain? Could the recent rally present a sell-on-rise opportunity?