Gautam Shah, founder and chief strategist, Goldilocks Premium Research, said that the worst might be over for Bank Nifty.
"In two years, the Bank Nifty hasn't done anything substantial. But now, there are concrete indications on the charts that possibly the worst could be over. All we need is a confirmation past 35,500. Once we get that, you could see a large move on the Bank Nifty all the way back to 37,500-38,000 and even beyond," Shah said.
He added, "So I'm a little optimistic. I'm a little hopeful the charts are better placed on the Bank Nifty and it could possibly be the reason why the Nifty recovers in the month of January."
Additionally, he mentioned that Nifty can see levels of 17,600 and even 18,200 in the coming weeks. He explained that 16,000 is the new medium-term base for the Nifty.
"I see many bottoming figures on the charts, all we need is a close past 17,250 and we are above it as we speak. So if the market is able to sustain above that number, you are going to see a trending move on the upside on the Nifty, that takes the Nifty to 17,600 and eventually, possibly even 18,200," he said.
On indices, Shah continues to like the IT index. "The IT index has made a phenomenal comeback after three-and-a-half months of consolidation. So that looks good. As we get into 2022, IT is one index that we continue to like. The largecap IT set up looks very solid on the charts," he mentioned.
He also remains positive on the pharma index. According to him, a lot of the pharma stocks are turning well now. He believes the pharma index can move up as much as 20 percent from current levels.
"The real dark horse or the surprise at least of the first half of 2022 could be pharmaceuticals. It's been in a corrective mode for the last six months. The comeback in the last 10 days looks excellent. Many of these top pharma stocks are turning from long term support and I do believe that the pharmaceutical index can move up 20 percent from where we are right now," he explained.
Shah opined that certain pockets within the market are doing well. He likes auto ancillaries, textile and sugar stocks.
"In the midcap space, we are looking at auto ancillary; we are also looking at textile, sugar and fertiliser. I think these are the three or four pockets that we like," he said.
On metals, Shah said that he is avoiding the space for now.
"There are some stocks in the metal sector that could turn around but currently, the focus should be on some of the other sectors in the market. So metals for me is an avoid," he said.
Watch the accompanying video for the full interview.