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market | IST

Market disregarding any bad news; 'banking-free' bull run to continue, says Gautam Shah

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Dalal Street has corrected significantly since February and after hitting a low of 7,610 on March 23 the Nifty has bounced back almost 50 percent. Gautam Shah, founder and chief strategist, Goldilocks Premium Research shared his views and outlook on markets.

The market has been on a steady rebound after the slump in the first quarter of the fiscal due to the COVID-19 pandemic. Dalal Street has corrected significantly since February and after hitting a low of 7,610 on March 23 the Nifty has bounced back almost 50 percent.
Gautam Shah, founder and chief strategist, Goldilocks Premium Research shared his views and outlook on markets.
“This is the market which is disregarding any possible bad news and that is the best way to read it. I would say that there is a lot more upside, our working target has been about 11,350 to 11,400. So it is a mini barrier but if the market is able to clear this - which is my view – we could move to levels of around 11,600 where the bulls are going to get a challenge. So this is still a buy on dips market. One should stay in the game,” he said.
Shah believes that there are a lot of opportunities across sectors and that this is a "banking free" bull market.
"...Something that we are seeing after a period of almost 5 years and many sectors are likely to do much better over the coming weeks and months,” he added.
Speaking about banking free rally, he further mentioned, “The baton has been passed. In the last five years every time the Nifty did well, we looked at the banks but now with what has happened in the last couple of months, it is pretty clear that the Nifty has recovered almost 70 percent of its fall whereas the bank has done just about 35-40 percent. This is a trend that is likely to continue because when we look at some relative strength chart, what is banking’s loss is now IT and the gain of (RIL. I think this is the trend that could continue for many months.”
On Reliance, Shah believes that one doesn't need to read the chart. "You need to read the news. That propel this stock higher. It is going to continue this way. This is a stock that will keep adjusting itself every time it gets a little overbought but I do see another 20-25 percent upside very easily over the next three-six months. So it has to be one of your top picks in any portfolio,” he explained.
In terms of IT, he said, “IT is coming back after a very long time. It is trading at lifetime highs. One of the first popular sectors to trade at lifetime highs. If you look at the relative strength chart versus the Nifty, it tells you that this outperformance is going to continue over the next six-twelve months.”
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