Leading market expert Ruchit Jain of MOFSL has issued a clear recommendation for investors holding ITC shares: maintain your current position but strictly avoid averaging down. Jain described ITC as a "big underperforming stock," highlighting its inability to build meaningful momentum even amidst a resilient broader market.
Patience, Not Panic, for ITC Holders
During a discussion on Business Today Television's Daily Calls, Jain addressed an investor holding 700 ITC shares at an average cost of Rs 320. His advice was to "stay put for now," emphasizing that the stock's weak price action does not warrant either a loss-making exit or fresh averaging at current levels. The core message is to hold, await a potential pullback, and only reassess if the stock shows recovery to better levels.
Jain underscored that ITC's relative weakness is central to this strategic call. "The stock has not seen any momentum building up along with the market rise," he stated, indicating that ITC has not convincingly participated in the wider market rally. This lack of technical confirmation currently discourages aggressive buying.
Why Hold, Not Sell?
Despite the sluggish chart structure, Jain explicitly advised against exiting the stock at a loss. "I would not recommend to exit and book losses," he said, suggesting that investors should avoid locking in losses after an already significant correction. This stance aligns with a common tactical approach for weak but not fundamentally broken stocks: preserve the position, wait for a rebound opportunity, and make future portfolio decisions from a position of strength, not distress.
No Fresh Capital for Now
A key takeaway from Jain's analysis was his strong caution against deploying fresh capital into ITC to average down. He stated, "Even I would not recommend averaging in this stock." This is a significant signal for retail investors who often respond to price declines by adding more shares to reduce their average acquisition cost.
According to Jain, averaging into an underperforming stock without visible momentum could potentially trap more capital in a slow-moving position. Instead, he advises investors to wait for "pullback moves" and review their strategy only if the stock rallies to higher levels, offering a more favorable entry or exit point.