JM Financial’s Gautam Shah believes that the stage is set for a big breakout on the Nifty. He is bullish on banks as well as oil & gas sectors too.
Sounding extremely bullish on the market going forward, JM Financial's Associate Director & Technical Analyst Gautam Shah said the Nifty is on track to hit 10,000-level in the next 6 weeks.
“Looking at the charts, it is pretty clear that the bulls are here for the long run, the marathon,” Shah said in an interview to CNBC-TV18.
The bullish momentum in the market was regained post its consolidation phase that lasted over the past one month. Shah said the movement only helped the market create a foundation for a breakout. “With earnings lined up now, the market is getting prepared for that big breakout.” The levels of 9550-9600 seen during this phase becomes a major support area, he added.
So, which sectors/stocks will lead the rally? Shah says if the Nifty had to break out next week, it had to be led by banking as well as auto stocks. “Banks as such saw a shallow correction. Now with PSU banks joining the party, there is a case for Bank Nifty to go beyond 24,000…look at the relative strength and beta factors, this is a space that wants to take leadership,” he added. This will be followed up by auto and power stocks.
Pharmaceuticals, he said, have made a durable bottom in the past week of May. There has been a nice recovery for these stocks, he added.
Having said that, there is still not much upside at this point, Shah told the channel. We have had negative or avoid stance on IT and pharma for a long time, Shah said.Meanwhile, he said he was very bullish on the oil and gas sector. Shah believes if the oil and gas index goes back to the level of 14500 and beyond, then a stock like Reliance can bounce back, he told the channel.The Great Diwali Discount!
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