United Spirits - Quant Pick - ICICI Securities

Recommendation

Buy United Spirits in the range of Rs. 575-585
Target: Rs. 690
Stop Loss: Rs. 520
Time frame: Three months

Derivatives & Quantitative Outlook

Consumption stocks have remained sideways in the recent market consolidation. Stocks like United Spirits remained significantly immune to the market volatility and was largely range bound. However, we believe it has absorbed most of the negative news during lockdown. The stock witnessed buying interest at every decline and was able to hold Rs. 570 levels on multiple occasions. We believe United Spirits is likely to move further higher in coming weeks on the back of short covering.

The open interest in the stock has increased sharply in the last couple of months and current OI in the stock is at a multi-year high. As the stock has failed to participate with a market move, we expect short positions to have been formed in the stock. First few sessions of the new series saw closure of open interest suggesting ongoing short covering. We believe ongoing short covering will continue, which should take the stock higher.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_QuantPick_UntedSpirits_Aug20.pdf

Shares of UNITED SPIRITS LTD. was last trading in BSE at Rs.587.05 as compared to the previous close of Rs. 579.8. The total number of shares traded during the day was 91951 in over 3140 trades.

The stock hit an intraday high of Rs. 593.5 and intraday low of 580. The net turnover during the day was Rs. 54094265.

Source : Equity Bulls

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