"We expect $80 a barrel crude risk to be low as we have enough spare oil capacity. Iran event will keep oil between $60 a barrel and $70 a barrel," said Arvind Sanger of Geosphere Capital Management in an interview to CNBC-TV18.
He said the potential sanctions on Iraq by the US is a bigger risk for oil prices.
International benchmark Brent crude futures crossed $70 a barrel mark for the first time since September 2019, rising nearly 3 percent to $70.49 a barrel after the US President Donald Trump issued a threat to impose sanctions on Iraq amid escalating tensions with Iran in the Middle East.
Brent oil prices jumped more than $5 a barrel this month after the US air strike in Iraq killed top Iranian commander Qassem Soleimani on January 3, which raised concerns of increasing Middle East conflict that could disrupt oil supplies from a region.
Middle East accounts for nearly half of the world's oil production.
Earnings season for the quarter ended December 2019 will kick off with Infosys reporting its numbers later this week. Most analysts expect earnings recovery will begin from first half of CY20, which seems to be priced in by the market.
"Market is already discounting a meaningful earnings recovery as the market has been trading ahead of valuations, but it offers value in midcap and smallcaps," Sanger said.
Market is ahead of economic fundamentals which have begun seeing a tunraround, he added.
The rally seen by the market was despite slowdown in the economy which grew at a slower pace of 4.5 percent in September quarter of 2019.
Geosphere likes some of the auto component companies in India now as auto components offer reasonable value, which is an area of interest, he said.
Among other sectors, the pullback seen in one or two PSU banks is interesting, he added.
Sanger also sees great value in some real estate stocks. "The worst is behind us but not in a rip-roaring recovery," he said.