1 Large Cap IT, 1 Small Cap Realty Stock To Buy As Recommended By ICICI Direct

Indian indices are set to open on a weak note as indicated by SGX Nifty which at the time of writing this report at around 7:00 am traded with loss of 0.17 percent. Asian markets too are trading mixed.

In such a equity landscape when record highs there is seen a phase of consolidation, ICICI Direct has put its bet on a realty stock as well as one IT stock, L&T Infotech.

1. Prestige Estates:

The real estate developer group operates in South India, including in the cities of Chennai, Hyderabad, Kochi, Mysuru etc. The company's portfolio comprises projects in residential, office, retail and hospitality segment.

"The realty index has shown resilience by retracing merely 38% (of mid Sept-Oct 35% rally) during the recent corrective phase, highlighting robust price structure. Within the real estate space, the share price of Prestige Estates is poised at key support of 50 days EMA that has offered fresh buying opportunity on past two occasions since June 2021. Hence, it offers a fresh entry opportunity with favourable risk reward o We expect the stock to resolve higher and retrace 80% of October decline (Rs. 507-416) and gradually head towards | 498 levels in coming months o We believe the stock has formed a strong higher base above 50 days EMA wherein it witnessed slower pace of retracement as over past 20 sessions. It retraced 80% of preceding five session's rally (392- 507), highlighting strength that bodes well for durability of next leg of up move o On the oscillator front, weekly MACD is sustaining above its nine period's average, that validates the aforementioned positive stance.

For the stock, the buy has been given for 3 months for a target price of Rs. 498, implying gains of 13.44 percent from the current price level of Rs. 441.10 per share.

Stop loss recommended for the trade is Rs. 398

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The buy on the stock has been given for a target price of Rs. 7540, meaning gains of 16.72 percent from the price levels of Rs. 6506.65 apiece currently. The IT Index in the last five weeks has witnessed profit booking after the stupendous rally of 50% during May-September 2021.

"The index during the current breather has witnessed a shallow retracement and has approached the 50 days EMA which has acted as strong support since May 2020. We expect the index to maintain its rhythm and resume its primary up trend taking support at the 50 days EMA thus offers fresh entry opportunity in IT stocks with favourable risk reward set up. The share price of Larsen & Toubro Infotech has outperform its peers and we expect it to continue. It has recently registered a breakout above the bullish Flag pattern and even during last three sessions corrective decline it is seen sustaining above the same signalling strength and continuation of the up move thus offers fresh entry opportunity. We expect the stock to continue with its positive momentum and head towards Rs. 7540 levels as it is the 138.2% external retracement of the last three sessions breather", says the report.

Stop loss suggested is Rs. 5840 per share.

Disclaimer

The stock mentioned herein is taken from the report of ICICI Direct and investors need not construe the details given here as a suggestion to buy rather they should do their own study and analysis.