Buy Godrej Industries; target of Rs 475: ICICIdirect

Quant Picks - Godrej Industries: ICICIdirect.com
Rationale

In the ongoing consolidation of the Nifty, midcap stocks have started to garner open interest. Godrej Industries is one such stock, which is likely to come out of the recent consolidation on the back of the build-up of addition of long positions and the recent delivery pick-up.

Futures data is suggesting resumption of long addition trend. In May, OI had come down to multi-month low of 1.60 million shares. Since then, the stock has seen constant yet gradual long additions while the current OI is 2 million shares. We believe long positions have been getting added in the stock at lower levels

The spread between 30 Day HV and 60 Day HV is still in declining trend in the recent up move of the stock. The spread is likely to further dip into the negative territory. We believe the 30 Day HV will decline further, which would take the spread in the negative territory. The decline in spread would lead to upsides in the stock.

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