breaking news This chartist believes us recession is not a trigger for Indian stocks and lists potential sectors to bet on
A potential recession in the United States will not be a key trigger for the Indian market and that such a prospect has been factored in, said Gautam Shah of Goldilocks Premium Research. CNBC-TV18 Friday. “I think a lot of the recession has been priced in,” Shah said, adding that the market knows what’s in store for us in terms of a recession over the next six months.
“I don’t think it will be a very big trigger,” he said.
However, despite the recession outlook factored in, Shah expects India’s benchmark Nifty 50 to trade in a range in the short to medium term, especially with a negative bias. Outlining the range, he said that 17,800 on the downside and 18,400 on the upside will be the key levels to watch and that breaking away from current levels will be higher for the benchmark.
The Nifty 50 index gained nearly 1,500 points from its March 20 low of 16,828, while the Nifty Bank was down 0.1 points from its all-time high of 44,151.8. Shah said Nifty Bank at current levels looks overheated as the entire recent rally has been led by banking names. Although not negative on space, but would prefer to take profits off the table.
Among sectors, the Nifty Auto index is up nearly 8% in the past month and Shah expects this trend to continue as the charts he says are “excellent”. He further added that their working target on the Nifty Auto Index is 15,000-15,500, implying an additional 12-15% upside from current levels. “In case the overall market sees some sort of short-term decline, autos are clearly a buy,” he said.
Another sector Shah is betting on is real estate, the index of which has also risen more than 7% in the past month. He sees “substantial upside” in the overall real estate space, even from current levels. “We recommend refueling every dip,” Shah said.
While PSUs are another theme that excites Shah, he would like to stay cautious about the Metal space. The Nifty Metal Index is down 1.5% over the past month. Shah advised investors to “stay away” from the space as he believes the sector has not performed well in good times and continues to come under a lot of pressure as markets pull back.