This chartist sees the Nifty Bank at 55,000; Sees 25% upside in SBI shares

Gautam Shah of Goldilocks Premium Research is seeing strength across the board in banking stocks and as a result, he expects the Nifty Bank index to hit a new record high.

Over the next two to three months, Shah expects the Nifty Bank to hit new highs, ahead of the Nifty 50 index and even faster than the benchmark.

“The message from the market is very clear that banking has been an outperformer and is likely to remain so,” Shah told CNBC-TV18 in an interaction on Tuesday, December 3.

Shah believes that a breakout above 52,500, which has been a barrier for the Nifty Bank during this recent consolidation phase, is coming and once that happens, the index will move to new peaks. The Nifty Bank currently has a record high level of 54,467.

“If that gets confirmed (breakout above 52,500), you are likely to see the Nifty Bank to hit new highs, much ahead of the Nifty and faster than the Nifty. Our working targets for the banking index is 55,000,” Shah said.

A target of 55,000 implies a potential upside of over 6% from current levels for the Nifty Bank index.

Shares of HDFC Bank, a key heavyweight constituent of the Nifty as well as the Nifty Bank has finally broken past its recent highs and is now trading well above the mark of ₹1,800.

“HDFC Bank has handled a very difficult period really well and this market has now moved from growth to value and many of the stocks that have done well over the last six weeks have been value stocks. Over the next few months, we can easily see HDFC Bank move to levels of ₹2,000 or even higher,” Shah said.

Apart from HDFC Bank, Shah also likes banking stocks like SBI, where he sees an upmove between 20% to 25% going forward. He is also bullish on ICICI Bank.

“So the key message is, in each of the major sectors, stick to the big boys,” Shah added.