Domestic markets continue to dance between gains and losses, remaining constrained. On Tuesday, the S&P BSE Sensex traded flat with marginal losses at 55,900 while the NSE Nifty 50 index was up with minor gains at 16,680. dropped in the previous session, but was back above 20 levels today. In an uncertain market environment, ICICI Direct picked two stocks that they believe will rise 10-13% over the next three months. The stocks are DLF and Indian Hotels.
Stocks were screened through ICICI Direct’s three-factor model for screening stocks through quantitative analysis. Here, analysts selected stocks from the futures and options universe and stretched them based on the recovery in deliveries over the past two weeks, measured their 30- and 60-day volatility, and then plotted them. filtered according to the frequency distribution model.
Target Price: Rs 385
DLF share price has fallen by 11% so far in 2022 to now trade at Rs 342 per share. Analysts said DLF showed a significant build-up in its price distribution pattern. “Daily stock returns are widely spread from -2% to 3%. Also, despite the volatility, positive counts are higher than negative counts, which is a positive sign,” ICICI Direct said. In terms of delivery, no major delivery activity was seen despite profit booking in April-May 2022, which analysts say is a positive sign.
“The stock’s 60-day volatility nearly tested 30-day volatility levels, suggesting stability in the stock and limited declines. We expect the stock to continue its uptrend as momentum is likely to be seen,” ICICI Direct said. Buy was advised in the Rs 327-335 range with a time frame of 3 months. A stop loss at Rs 300 was recommended.
Indian Hotels: BUY
Target Price: Rs 267
Indian Hotels hospitality stock has climbed 29% in 2022 to date, outperforming Nifty which has fallen 6%. Over the past few months, analysts say the stock has shown remarkable resilience. “The stock has shown significant resilience in the mid-market corrections and no major delivery-based selloffs were seen,” the analysts said. On the delivery side over the past two weeks, ICICI Direct said the stock has seen below-average delivery despite selling pressure suggesting the exit from weak hands. “It is close to its Rs 230 support zone. However, we believe the Z score has reached near its zero line. We are waiting for the new delivery to the support area.
The 30-day volatility has moved closer to its 60-day volatility due to the recent decline seen in the stock. Going forward, volatility should subside and the ongoing momentum may continue in the stock. The buy was suggested in the Rs 227-232 range with a stop loss at Rs 208 per share.