ICICI Direct analysts handpick 9 techno-funda stocks that can rally up to 29%

"Our preferred pick within the large-cap capital goods space is Larsen & Toubro as it has logged a resolute breakout above 12 years long rising supply line joining highs since CY10 (Rs 1043) highlighting acceleration of up move," ICICI Direct said.

Post breakout the uptrend is well defined by stronger rallies and shallow retracements, key ingredients of structural bull phase, it added.

"Nifty Infra index hit a new high last month after 13 month’s consolidation and Ambuja has been a key outperformer, with high relative strength. Key observation has been that stock has given strong breakout in September from large rounding bottom and now placed on the cusp of past two month’s consolidation signalling inherent strength and provides entry opportunity," the brokerage firm said.

"The auto ancillary space continued its primary up trend. Technically, we are constructive on Bosch, which we expect to outperform as it has generated a breakout above long-term supply line joining highs since CY15 (Rs 27990) signalling turnaround after a long period of underperformance," the brokerage firm ICICI Direct said.

"The banking sector has been spearheading the ongoing bull run, we expect it to continue its outperformance as the Bank Nifty has recently generated a breakout above its 14 months range. Federal Bank is our top pick among midcap banking stocks," ICICI Direct said.

The stock has recently generated a resolute breakout above its last five years range (Rs 127-36) as it resolved above CY17 highs (Rs 127) signalling a start of a new bull phase, it added.

"The BFSI space has outperformed in CY22 while NBFCs are now catching up amid signs of interest rates nearing its peak. Sundaram Finance’s share price has given a falling channel breakout signalling the end of its 15-month corrective phase and resumption of uptrend," ICICI Direct said.

From a structural point of view, the share price has retraced its 2020-21 rally (982-2868) by 61.8% over 15 months indicating a slower retracement that augurs well for long-term price structure, it added.

"The BSE Consumer durables index has been consolidating in CY22 after a strong rally of CY20-21, thus forming a higher base. Within the space, we like Bajaj Electricals with favourable risk-reward," the brokerage firm said.

The stock is currently placed near the key support area of Rs 1000-1100 as it is the confluence of rising 12 months EMA (currently at Rs 1125) and 50% retracement CY20-21 rally (Rs 263-1588), it added.

In the power infra space, one of our top recommendations is KEC, which is resolving out of a triangular consolidation pattern of the past two years indicating the resumption of an uptrend, the brokerage firm ICICI Direct said.

Structurally, the share price has formed a strong base around the 350-370 zone, which was earlier breakout level and rising 52-week average, it added.

"The share price of Mishra Dhatu Nigam has recently generated a resolute breakout above 30 months triangular consolidation with strong volume of more than double of its 10 months average volume of 0.2 crore share per week signalling resumption of up move," ICICI Direct said.

The stock has retraced its 28 months' corrective decline (Rs 278-156) in just six months signalling faster retracement indicating structural turnaround, it added.

"The BSE power index gave a breakout above 2008 highs after decade-long consolidation. Within the power infra segment, Techno Electric is on the cusp of breakout from four year’s consolidation indicating structural turnaround," ICICI Direct said.

"The stock has witnessed renewed buying momentum over the past few months and forming a higher high low indicating a steady uptrend. We expect rallies to further accelerate above 320 which acted as a hurdle on numerous occasions," it added.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)