The Reds crashed 2-1 against Barnsley on Tuesday but still lie third in in the Championship, eight points behind West Brom in second place.
Davies told the club's official website: "I don't think the players have been down. They shouldn't be because we're still where we are - third in the league and in a very strong position.
"There's no reason to be down. We're not in a relegation battle and we're not in mid-table obscurity.
"We are in a very strong position and I still genuinely believe if we can pick up some good results then many things could happen between now and the end of the season."
Source: Team Talk
Source: Team Talk