Prefer capital goods, oil & gas space: Gautam Shah

Gautam Shah, Associate Director & Technical Analyst at JM Financial told CNBC-TV18, "My top picks would be the bank Nifty because we are still looking at it as a very lucrative space from a risk reward angle. Apart from that I really like the set up of the capital goods index. The index had seen a 3,000 points fall in the last couple of months. It had developed a sort of pattern on the charts and from that very pattern we have seen a breakout in the last three or four days and the strength in stocks like BHEL, Siemens, and L&T really explains that. This is just the beginning of the next phase of the big move in the capital goods space. It is an index heavyweight space; these are big names, big market cap names which have the potential to take the index with it."

"I would like to believe that the capital goods index could potentially see a 12-15 percent move over the next 3-6 months and this is one of the better spaces n the market right now. Apart from these two oil and gas even though has been a sort of a laggard. From a buy and hold perspective the risk reward is very good because after the rally seen early this year oil and gas also has got into a bit of a consolidation," he added.

"ONGC and Reliance Industries have underperformed but apart from these two other stocks in the sector including the OMCs have done very well. So these three would probably be my best picks and along with these three I would also go for autos. I have always said good times or bad times you need to have a pretty large weightage in your portfolio in autos because they are stocks that are making new highs on weekly basis and I really don’t see this trend reversing for months to come," he said.