Goldilocks' Gautam Shah: Autos will continue to be darlings of market; buy any auto names on dip

“The bigger opportunity today would be in autos, in fast-moving consumer goods (FMCG) and insurance. They are the new darlings of the market and FMCG space might help bailout Nifty near support levels.”

A 1,500 point rally on the auto index is likely, Shah said.

“Many sectors are gradually moving back to their February-March highs. The auto index is still 15 percent away from those numbers. So I see a 1,500 point rally on the auto index and this outperformance is going to continue. We have been recommending staying topped up and use every decline as a buying opportunity,” Shah said.

He further said, “If you are a medium-term investor, this is an opportunity, sanity is back on the screen, it is good to see people are little cautious, so for investors, this is a good opportunity.”

On Bank Nifty, Shah said, “It took a lot of buying and a lot of effort to take the Bank Nifty to that level of 32,600. Once the Bank Nifty completes the V-shaped recovery, you could see a corrective phase. That has happened in the last week. I still don’t see immediate signs of strength, the Bank Nifty can go down to a level as low as 30,500 and even 30,000 and below cannot be ruled out. So I don’t see an opportunity there. From an investment perspective, you could still consider investing in Bank Nifty but as a trading opportunity auto, FMCG and insurance are my top bets.”

Metals could see another 20-25 percent upside, Shah said.

“Long-term the structural bull market in metals is intact. We see another 20-25 percent upside if you have a waiting period of about 6-12 months but near-term I don’t see it as an opportunity.”