Market laying foundation for greater upside; buy pharma, IT on dips: Goldilocks Premium

FMCG and pharmaceutical stocks are likely to do very well. “I see FMCG index moving towards 40,000 – it has moved without the participation of ITC. There is a lot of buzz, the likes of Marico, HUL, Nestle, Colgate, Jubilant Foodworks, all have done well,” he stated.

Pharma and IT are megatrends, which are not going to go away in a hurry. Shah added that pharma index has been trending higher and could head towards 15,500. “So, all market dips are a buying opportunity there. We have been liking Glenmark Pharmaceuticals, Sun Pharmaceutical Industries, Lupin, Aurobindo Pharma – all of them look good to us from a medium-term standpoint,” said Shah.

Autos look interesting. He sees big opportunity in the auto sector. “From current levels of about 10,600 on the NSE auto index, I see an eventual move towards 12,000, so I see a big opportunity in the auto space,” he shared.

According to him, metals have peaked. “Metals have stopped making higher highs, so it is a pause, the longer-term structural uptrend is intact but in the near-term, I don’t see alpha being generated from the metals space,” he said.

He is bullish on the banking sector and that view remains intact, he said.

Infrastructure and paper are the two spaces that Shah sees immense opportunities over the next six-twelve months.

“Just the top three-four names in paper have the potential to move big,” he said.

He believes entertainment, airline, hotel and auto stocks look very strong in terms of unlock trend.