Public trading strategy
Accenture warns on tech spending — short Indian IT stocks
Thesis
When the industry leader like Accenture warns that business is slowing, it usually means the whole sector is in for a rough patch. Indian IT companies do a lot of the same outsourced work, so a warning from Accenture is a direct red flag for their future profits. The selling pressure could continue as analysts lower their estimates.
Strategy approach
Build a mean-reversion or trend-following short strategy on the Indian tech sector using INFY and WIT on the daily timeframe. Enter short if the stock closes below its 20-day low. Set a 10-day hold period and a 5% stop loss.