Domestic stock markets have been inching higher in recent days as bulls assert control on Dalal Street. However, indices still face multiple headwinds and analysts are not ruling out profit booking at higher levels. Meanwhile, stock-specific action continues on Dalal Street. Amid this, ICICI Direct’s stock filtration model is flashing a ‘buy’ sign for Larsen & Toubro Infotech along with IDFC First Bank. Analysts have tracked derivatives data for the stocks and their historic volatility which leads them to believe that these two stocks could rally in the next three months.
Larsen & Toubro Infotech: BUY
Target: Rs 4725 per share
Although technology stocks have remained lacklustre during the current market rally, analysts believe that after earnings, fresh gains are likely to be seen in select midcap technology stocks. “Stocks like LTI are moving out of the hurdle of Rs 4100. The price distribution is also suggesting limited downward movement in the stock,” ICIC Direct said. “From a delivery perspective, the last couple of weeks saw below average delivery despite the selling pressure, which suggests exiting of weak hands near the support of Rs 3800. However, we believe the Z score has reached near its oversold territory. We expect the fresh delivery at the support zone,” they added.
The volatility in the stock is expected to subside in the days to come. Analysts have recommended a stop-loss at Rs 3730. The target price suggests 7.5% upside from Wednesday’s levels.
IDFC First Bank: BUY
Target: Rs 39 per share
The banking stock has remained under pressure so far this year, falling 29%. “However, the stock is exhibiting significant accumulation in its price distribution pattern. The daily returns are largely distributed from -1% to 1%. Furthermore, the right tail is almost similar to the left tail but a bit longer suggesting positive bias prevailing in the stock,” ICICI Direct said. They added that delivery was clearly visible in June. “However, the stock is exhibiting significant accumulation in its price distribution pattern. The daily returns are largely distributed from -1% to 1%. Furthermore, the right tail is almost similar to the left tail but a bit longer suggesting positive bias prevailing in the stock.”
A Stop-loss of Rs 30 has been recommended by ICICI Direct. The target price of Rs 39 per share suggests a 10% upside potential from Wednesday’s levels.