If one looks at the ongoing correction, it is clear that, more than anything else, it is valuation readjustment that is taking place. Stocks which have been trading at price earning multiples of 80 are the ones taking the maximum hit. Will this correction continue? Very likely, yes. Especially as Q3 earnings are unlikely to throw up many positives, and there is a new headwind in the form of a spike in crude oil prices. Now, rather than worrying about how long the correction will continue, it is better to focus on the underlying businesses of the stocks you own. If the fundamentals are fine and are improving, then ignore the short-term noises which are bound to increase in the coming weeks. Our selected stocks for the day depict a strong upward trajectory in their overall average score which is based on five key pillars – earnings, fundamentals, relative valuation, risk, and price momentum. This implies that there has been a significant improvement in their market outlook in the given time frame.
