PSU banks likely to do well: Mithil Pradhan

PSU banks and housing finance companies are likely to do well going ahead, says Mithil Pradhan of Violet Arch Capital Advisors.

Pradhan told CNBC-TV18, "I think the best part of the rally in Bank Nifty is completely over at this point of time though I do not rule out further rallies from here. So the last few days especially in December, the markets are just going sideways. There are two ways to look at this; the first way is this is a consolidation and some might want to call it a reversal. Having said that consolidations usually breakout on the upside and this is absolutely flat consolidation where the market is going nowhere, it is just buying time."
He further added, "I do not have specific levels for Bank Nifty but then I would like to use Nifty levels out here. The make or break level for Nifty at this point of time is 5,658-5,708. So any decline of 150 points, I would say 3 percent decline in the market today is buying opportunity."
"Financials as a matter of fact is the strongest space in the market today. So while the initial rally in Bank Nifty was held by ICICI Bank or Axis Bank or the private banking majors, I think public sector undertaking (PSU) banks have all broken their medium-term make or break levels.”
“So Allahabad Bank, Andhra Bank and any PSU bank that you would like to think about, all these are about to give about 30-40 percent kind of appreciation from here and not only that I have been looking at other financial stocks, let’s say housing financial stocks, in fact they are also showing great patterns on their daily or weekly or even some of them are showing on the monthly charts. So while I do not remain hopeful for a large rally in Bank Nifty per se, I think so the other end of the market like PSU banks, housing finance companies are actually going to do pretty well from here."