Most top players agree that you must watch the approaching ball.  Then as you contact the ball, you must focus your attention on your opponent’s racket.  By watching the incoming ball, you will be able to make the last second adjustments.   Then, by watching your opponent’s racket, you will have a good idea of what stroke he will be using and where he generally intends to hit (even prior to him hitting the ball).  These concepts are very basic.