Excerpts from CNBC-TV18's exclusive interview with Gautam Shah:

Q: Your think it is still good for 18,000 the Sensex?

A: Absolutely. That’s been our call for the last two-three weeks and we had initiated a medium-term target of about 18,000 and about 5,300 on the Nifty.

It is quite beautiful the way the markets have rallied in the last two-three weeks consolidating at every stage. Early last week that the Sensex and Nifty was locked in a small 200-250 point range and then once we broke out from that range on Friday there was a flurry of activity. I guess this consolidating and moving higher kind of a scenario should continue over the next couple of months.

It does look like the month of May should go off on a very strong note. It does not have a very great track record if you go by cycle analysis but given the way most of the technicals studies are placed at this point; there is the unfolding of a major bullish pattern on the charts, we have important moving averages being taken out, the Elliott Studies are strong and to top it all the US market setup continues to look very encouraging.

We are backing our target of 18,000 and I would not be surprised over the next couple of quarters if we see much higher than those levels as well.

Q: Some of your peers though have been making the point that this rally doesn’t look very durable. Do you expect it to be a clean run from 17,000 to 18,000 and more importantly do you expect it to stick?

A: I think so and  that’s the reason we came up with a contrarian call of a World Bottom in the month of March and you have seen markets across the globe gaining anywhere between 7%-20% over the last two-three weeks. The conviction is not there that is good because that is really helping the markets move higher and till you have most people convinced that we are back in an uptrend, I think this market will continue to move higher. That’s the reason we believe that around 18,000-18,500 is where you could see some problem for the bulls. Those are the levels where the bulls will be tested.

But at this point we should see a clean run and after what happened on Friday most technicians and most market participants, who look at the 200-day exponential moving average, would now be convinced that yes markets have moved above averages and therefore they should be moving higher. But the point is we have already missed 2,500-points from the downside meaning 14,700 to 17,200 is a good 2,500 points and that is 17%.

This move will continue although we have seen a certain section of sectors doing well in the last two-three weeks, some of the midcap stocks have really comeback in the last couple of weeks. So in a nutshell the momentum will continue and more stocks and sectors will participate and take the markets higher in the near-term.

Q: What about real estate- that’s also beaten down sector which is trying to claw back? Do the charts look like they can give you a bit of a bounce?

A: Yes. It’s a high-beta sector and over the last few weeks we have been covering a few real estate stocks in our technical reports on the buy side. In fact we have covered a few stocks in our report today as well. This is a sector, which got unnecessarily beaten down; fundamentally one could talk about valuations but technically there was no reason to see a 60-65% drop in a matter of couple of months.

Most of the real estate stocks are at medium-term, long-term support levels and we have seen a recent bounce in the last couple of weeks and some of the stocks move up 10-12%. But because the fall itself was so huge around 60-65%, I think even from current levels you could see the real estate outperform and rally anywhere between 15-20% over the next two-two and a half months.

This is a sector, which we like and if somebody is not bought into the sector in the last one-month, I think there are still opportunities in this space.        

Q: Two back-to-back weekly gains for the US markets how much of this pullback is because of the market’s own internal strength and how much because of the global rally or stability we have been seeing this fortnight?

A: When we were around 15,000, we gave a lot of importance to the global set up because the local set up at that point of time was not very encouraging. We had hit a long-term support in a form of 14,700 but there was no confirmation that the markets will move higher and that’s when we looked at the charts of the US markets, which looked very ripe for a rally and that is when we came up with a call of new highs for the US markets in a matter of two-two and a half months.

We have seen the Dow rally about 1000-points in the last two-three weeks; we have broken out of that level of 12,700-12,800 on the Dow. The Dow also seems to be consolidating for the last couple of days and I would not be surprised to see the Dow rally another 700-1000 points over the next one-month.

I think the US market is acting as a trigger and is helping the market really move higher. Eventually we will have the local set-up takeover because in the recent past the Asian markets have rallied because of the US markets. We did not have too many local triggers apart from what Infosys did to the market. So Dow will remain as a positive trigger for our markets going forward. But now I think locally itself we have a very strong set-up to move higher.