Most investors tend to believe that any correction in a stock is an opportunity to buy. That is like trying to catch the proverbial falling knife. Every correction in stock price does not make it attractive. More often than not, sharp corrections are a result of key technical and fundamental shortcomings. Jumping in and buying such stocks will be foolhardy. The key is to spot and avoid falling knives!
FROM THE EDITOR’S DESK
Back in 2010-11, when the stock price of Kingfisher was falling rapidly, many investors were wondering if it was a golden opportunity to buy the stock. It was still a classy airline, part of a profitable group and had clear market share. But things had begun to change. Debt was too high, cash was crunched and the company was hurtling towards operating un-viability. Continue reading