Don't rush to sell shares; start nibbling at beaten-down stocks: CK Narayan

In a chat with ET Now, Dr CK Narayan, Founder, Chart Advise, shares his short-term outlook on the market.

ET Now: How should one approach the market in the coming week?
Dr CK Narayan: One is always wary of the market. That feeling never goes away. But then there are times, when things get overdone. One of those typical signs is when there is across-the-board capitulation. On Friday, we saw an evidence of that. Now, is it the last of the capitulation or will we have another round, it is very difficult to say. I think that Friday's selling has forms at least a short-term bottom. Now as a trade, such short-term bottoms are of interest to me. But I need to confirm that this is a short-term bottom.

So, playing for a short term bottom or turning a contrarian means I would take up a bit of positions. I have my stops and I am willing to run the risk where I maybe wrong. But then if I am right, then I should turn aggressive in the following week on stocks that I prefer. We mentioned some sectors and stocks. I would add cement sector to that list. I think whether to short those stocks at these levels, that is a call I would probably take on Monday after about an hour's trading. I am not rushing into sell at these levels. I am actually advocating nibbling at stocks that are your favourites. I think most stocks are beaten-down and so start nibbling at them. Do not go in all the whole hog. But certainly, you should start nibbling because you do not get chances such as these very often.