Domestic stock markets slipped on Tuesday, continuing their volatile trending momentum amid multiple headwinds. S&P BSE Sensex and NSE Nifty 50 were both down more than 0.30% each on Tuesday. India VIX, the volatility index, was up in the green as benchmarks slid, sitting above the 21-level mark. Analysts have been advising investors to take a stock-specific approach in such a volatile market environment. Catering to this, analysts at ICICI Direct have picked stocks that they believe could rally as much as 17% in the next three months.
Target price: Rs 2,575
ABB is a techno-fund pick of ICICI Direct with a target price of 2,572 per share. On the technical side, analysts at ICICI Direct said that a slower pace of retracement above 200 DMA offers a fresh entry opportunity for investors into the ABB stock. “During June 2022, the share price has undergone a healthy retracement of the strong rally seen during May 2022. This resulted in the higher bottom around Rs 2100 levels, which is an 80% retracement of the May 2022 rally and value of rising 200 DMA,” they added. The brokerage firm expects the stock to maintain positive bias and head towards Rs 2575 levels in the coming months as it is the 123.6% retracement of the most recent decline. This would translate to an upside of 12% from the current price of Rs 2,297 per share.
On the fundamental side, analysts noted that ABB continues to see recovery in certain segments and industries like datacentre, renewables, electronics, food & beverages and pharma. “We expect revenue, EBITDA to grow at CAGR of ~21.3%, 30.9%, respectively, in CY21E-23E due to strong traction in short-cycle products and services,” they added.
Eicher Motors: Buy
Target price: Rs 3,350 per share
“Broader markets have been witnessing volatility after sharp declines were seen in the last couple of weeks. However, auto and auto ancillary stocks have shown significant resilience in the recent market volatility and have seen sharp pullbacks. We believe Eicher Motors is one such stock that is likely to outperform in the coming days,” ICICI Direct said in a note. The open interest has grown in the stock recently which could take the stock higher soon. “From the options space, the stock has the highest Call option base placed at the 2900 strike followed by 3000 strike. As the stock has been seeing momentum, closure of positions was seen in ITM Call strikes. These positions are shifting to higher OTM strikes,” analysts added.
ICICI Direct said current levels provide a good entry opportunity for investors. “In the current month, noteworthy delivery volumes increased in the stock between Rs 2600 and Rs 2700 levels. We expect levels around Rs 2600 to act as crucial support for the stock in the short-term,” analysts said. A stop loss is suggested at Rs 2,590 per share.