“We ended the price correction last Monday at levels of 21,800,” Shah said in an interview with CNBC-TV18, adding that the combination of technicals and sentiment pointed to ‘a panic bottom’.
The benchmark Nifty has since rallied sharply, adding over 1,200 points in a matter of days. Shah expects the index to trade in the 23,800–24,000 range in the near term as the market enters a phase of time correction. It will be a “stock picker’s market” over the next few months.
Also Read | ‘Sentiment is a contrarian indicator’: Devina Mehra
Shah is particularly bullish on the financial sector, especially large-cap names. “The top three banks, the top two NBFCs — I think they’ll do very well,” he said, pointing to the relative strength shown by key names during the recent correction. “…this is where smart money seems to be hiding,” he added.
Bank Nifty, he believes, is on track to be the first index, after financial services, to hit fresh lifetime highs. From the current level of around 52,000, he expects Bank Nifty to rise to 55,000 in the near term, with a potential move to 60,000 over the next 18–24 months.
However, he remains cautious on capital market stocks, citing their strong past performance and a shift in market themes.
Among other sectors, real estate is at a long-term support level, and the top four or five names could deliver returns of 20–25% from current levels. Metals, too, are setting up for a rally, and Shah estimates a 10–12% upside from current levels.
Also Read | Motilal Oswal sees 12% market returns this year
For the full interview, watch the accompanying video
Catch all the latest updates from the stock market here
