8 quality stocks ICICI Securities suggests buying in volatile market

PSU banking Index has recently witnessed a structural turnaround and State Bank of India has been an outperformer within the space as it has maintained a higher peak and higher trough on the long term chart. The brokerage expects it to continue its outperformance.

The uptrend is well defined by stronger rallies and shallow retracements, key ingredients of a major bull phase. During this phase, incremental buying demand is getting attracted at five-month average, held since November 2020 and even in the recent correction.

ICICI Securities expect it to continue its positive momentum and retest its all-time high of Rs 549 in the coming months.

After displaying a spectacular up move during CY20-21, the IT sector has taken a breather. The brokerage's preferred pick in the IT space is Mindtree, which is forming a potential double formation in the vicinity of long-term 52 weeks EMA. It offers a fresh entry opportunity with a favourable risk-reward.

The stock has undergone a slower pace of retracement over the past four months as it retraced less than 50% of the prior six weeks' rally (1951-4938), indicating inherent strength that bodes well for the next up move.

The brokerage believes the ongoing base formation has set the stage to resolve higher and head towards Rs 4,148 as it is the 50% retracement of mid-January-February rally placed at Rs 4,150.

Cement stocks, after six quarters of the strong up move, have witnessed shallow retracement in the last two quarters and are currently seen rebounding taking support at the previous major multi-year breakout area, thus offering a fresh entry opportunity, the brokerage said.

It expects the stock to resume its primary uptrend and head towards Rs 348 levels as it is the 50% retracement of the previous decline (Rs 373-302). The stock has already taken six months to retrace just 80% of its preceding six months up move (Rs 274-442). A shallow retracement signals a robust price structure and a higher base formation.

The auto ancillary space witnessed profit booking in the last two months after the stupendous rally of CY21. The brokerage believes the last two months' profit booking has helped to work off the overbought condition and is currently placed at an attractive level.

The share price of Balkrishna Industries is currently placed near the key support area of Rs 1,700-1,800 as it is a confluence of the lower band of the rising channel and 80% retracement of the previous rally (Rs 1,552-2,723) thus offering entry opportunity. ICICI Securities expects the stock to resume up move and head towards Rs 2,010 levels.

The retail stocks posted a strong recovery in CY21 leading their way to new highs scripting turnaround on long term charts. Aditya Birla Fashion & Retail price has resolved out of its six-year consolidation phase signalling structural turnaround and a new bull cycle ahead. The stock is currently seen forming a higher base above the long term breakout area signalling strength.

The brokerage expects the stock price to head towards Rs 305 levels as it is an 80% retracement of the recent breather. Monthly MACD is in an uptrend and is seen diverging from its nine periods average thus validating positive bias.

The share price of IEX is seen rebounding after taking support at 80% retracement of major up move (Rs 152-335) and in the vicinity of 52-weeks EMA signalling fresh entry opportunity and favourable Riskreward at the current juncture.

ICICI Securities expects the stock to regain upward momentum, and head towards Rs 232 as it is a 50% retracement of the January-February decline. The stock has already taken four months to retrace just 80% of its preceding two months up move (Rs 138-335). A shallow retracement signals a robust price structure and a higher base formation.

Over the last two months, the stock has seen shallow retracement of preceding six quarters of strong up move. Currently, the stock is seen rebounding from the rising 200 days EMA (placed at Rs 1,512) and the 61.8% retracement of the previous major up move (Rs 1,161-2,018), thus offering a fresh entry opportunity with a favourable risk-reward set-up.

The brokerage expects the stock to resume up move and head towards Rs 1,800 levels in the coming months as it is a 61.8% retracement of the recent breather (Rs 2,018-1,505). The weekly stochastic is converging towards its average amid oversold territory indicating the possibility of an impending pullback.

The sugar stocks have remained in a structural uptrend forming higher peak and higher trough in the long term chart. The stock after the last one month’s breather is seen forming a higher base around the last year's highs placed around Rs 380 levels.

The stock has managed to hold above upward sloping support trend line joining lows since March 2020, highlighting elevated buying demand that signifies inherent strength.

The brokerage expects the stock to maintain positive bias and head higher towards Rs 445 levels as it is an 80% retracement of the recent breather (Rs 456-366).