Shah sees strong support for the index between 25,325 and 25,400, as long as that zone holds. He expects the next leg of the rally to be driven by mid-cap and small-cap stocks, which have lagged so far.
The mid-cap index, he said, needs to cross 60,000 for a potential 3,000-3,500-point upside, while the small-cap index must sustain above 18,200 to aim for 20,000 — close to lifetime highs.
On sectors, Shah continues to favour financials, metals, autos, power and infrastructure, with a special focus on public-sector banks. “I like the top three or four PSU banks, and I think they’re going to register stellar returns over the next six to 12 months,” he said.He remains cautious on information technology, fast-moving consumer goods and pharmaceuticals, which he believes are not showing strong trend signals.
In commodities, Shah expects a pause in the recent rally in gold, silver, and Bitcoin, noting that a short-term correction of 10-15% is normal after a sharp rise.
He added, “The focus is going to go back into equities. Equities is where the bigger opportunity could be over the next six to 12 months. But don’t get me wrong, I remain positive on gold and silver, if somebody is taking a three-year view, but if you are taking a three to six month view, these might not be good levels to add.”
For full interview, watch accompanying video
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