IT stocks likely to surge on September 9: Gautam Shah 12-15% growth forecast
On September 6, 2024, Gautam Shah, founder and chief strategist of Goldilocks Premium Research, shared his insights about the current stock market trends and investment strategies. With over two decades of experience in technical research, Gautam Shah is well-known for identifying major stock market trends. According to him, the recent market corrections are only temporary, and investors should adopt a long-term approach to benefit from upcoming opportunities.
Gautam emphasized that despite recent dips in the Nifty index, which saw declines of 3-5% several times over the past few months, these were short-term corrections rather than signs of a major crash. The Nifty has found immediate support at the 24,800 level, and there’s a strong base near 24,300. Investors and traders should watch how the market reacts to these levels, as they could determine the market’s next move.
Sectors to Watch for Outperformance
Shah highlighted the importance of being sector-specific when investing in a consolidating market. He favors sectors like IT, pharma, FMCG, metals, and chemicals for the long term. On the other hand, he advised staying away from sectors like PSU, capital goods, infrastructure, and autos, which have seen a sell-off after strong performances in the past 18 months.
IT Sector Expected to Deliver Strong Returns
Regarding the IT sector, Gautam Shah expressed optimism, stating that it has entered a new structural trade. Stocks like HCL Tech, Tech Mahindra, TCS, and Infosys have shown impressive movements in recent months. He believes that valuations in the IT sector are still attractive, especially in mid-cap IT companies. Shah predicts that the IT index could outperform the broader market, delivering 12-15% returns over the next year. Investors should consider selective buying in IT stocks for substantial returns.
Short-Term Caution in Banking Stocks
When discussing the banking sector, Gautam advised caution for short-term investors. He pointed out that a battle between bulls and bears has been evident in the banking sector over the past few months, with banking stocks witnessing selling pressure at higher levels and support at lower levels. This trend is expected to continue, and Gautam suggested avoiding banking stocks until Bank Nifty breaks through the 51,750 level on a closing basis.
However, for those with a medium- to long-term outlook of 6-12 months, Shah sees opportunities in banking stocks, which offer good value at current levels. Investors with this mindset can consider entering the sector after careful evaluation.
Focus on Financial Services for Medium-Term Investments
For medium-term investments, Gautam Shah emphasized a preference for financial services, particularly NBFCs, insurance, and housing finance companies, which are likely to outperform. He mentioned Bajaj Finance and Bajaj Finserv as his top picks in the NBFC space, suggesting that these stocks hold strong potential for growth in the coming months.
Stocks to Consider for Investment
Gautam Shah also provided recommendations for specific stocks across different sectors. In the IT space, his favorites include HCL Tech, Tech Mahindra, and TCS, while in the mid-cap segment, he prefers LTI Mindtree and Coforge. In the pharma sector, Gautam is bullish on Dr. Reddy’s, Sun Pharma, Cipla, Alembic Labs, and Laurus Labs. For those interested in the FMCG sector, he sees potential in ITC, predicting a 20% upside from current levels.
In the metals and chemicals sectors, Shah recommends investing in JSW Steel, JSPL, SAIL, Nalco, Deepak Nitrite, and SRF. He believes these stocks offer a favorable risk-reward ratio, making them attractive investments in the current market environment.
Today Big jump in HCL Technologies share price, reached 52 weeks high of 1765.85.
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The opinions expressed in this article are those of the expert. Localharyana.com or its management is not responsible for these views. Users are advised to consult certified professionals before making any investment decisions.
