Morgan Stanley :)

Mr Gautam Shah of JM Morgan Stanley gives his perspective on where the markets are headed.

Do you sense a jump to 15,000 on the index next?
Yes absolutely, I think we should be going much higher. This is a market that has behaved extremely well in the last couple of months.
We are continuously making higher tops and higher bottoms without any problem whatsoever.
Every time there is a correction, we are retracing it very quickly.
The fact is that once we take out important resistance levels, the market consolidates before moving higher. So the fact that markets are consolidating and rallying is very positive because it is only rational and very acceptable for most market participants. Given some of the pattern breakouts last week, I guess we will see strength all this month and possibly a level of 15,200 on the Sensex, 4400 on the Nifty, which we have updated as our short-term targets.

What about the medium-term - what kind of levels can you see for you?

We initiated our conservative medium-term target of 15,500 last November. So we are maintaining our conservative call of 15,500.
But I guess the kind of strength this market is showing and the fact that we should be topping out sometime in April-May this year, I guess my medium-term target of 15,500 should be exceeded.
We are not talking of any levels beyond that right now, maybe we will take a call after the next couple of weeks once we are around 15,000.

What is the significant level that you had broken in terms of resistance last week? Do you foresee a clear run from here to 15,000 plus?
Yes, I think it should be a very clean run because I think we have consolidated really well in the last couple of weeks.
Clearly, I think 14,000 -14,300 has been the range for the Sensex. A couple of times we tested 14,000 on the downside and I thought 14,000 was an important resistance in December because we corrected 1,200 points from that level. Even in early January, we corrected from 14,000.

Which sectors do you see leading this move up to 15,000?

Since it will be a very straight run all the way to 15,000 plus, I think this is what every sector is going to participate.
But I think oil and gas has been our favourite for the last couple of months. There are a few index heavyweights in the oil and gas space and I think this is a sector, which is likely to be a star performer this month.
Along with oil and gas, auto is one space, which we really like. Most stocks in the sector have the technical set-up to gain as much as 10 per cent in the next 2-3 weeks.
So we are banking on oil and gas and autos from a near term point of view, and mid-caps and small-caps will continue to outperform till the market actually tops out in the month of April and May.