Is ITC stock nearing the end of a 21-month correction? Bajaj Broking sees a 14% rally in 6 months

ITC share price: ITC Ltd has emerged as Bajaj Broking's latest "High Conviction MTF Pick", with the brokerage expecting the FMCG and cigarettes major to rebound over the next six months as its prolonged correction shows signs of nearing exhaustion.

The brokerage has recommended accumulating the stock in the ₹286-292 range with a target price of ₹330, implying a potential return opportunity of 14% over a six-month investment horizon.

According to Bajaj Broking, ITC has spent the past 21 months in a corrective phase and is now consolidating around an important long-term support zone. The brokerage believes this technical setup offers a favourable risk-reward proposition and could pave the way for a pullback in the coming months.

The report points out that the current correction closely resembles the company's previous major downturn in both price and duration. Between July 2017 and March 2020, ITC declined from ₹338 to ₹124, a fall of over 63%. Meanwhile, the scrip has lost 5% in 1 month, 29% in 6 months and 30% in 1 year.

The ongoing correction has seen the stock slip from ₹485 to ₹275, translating into a decline of 210 points over roughly 21 months. According to the brokerage, the similarity in both magnitude and time suggests the present corrective cycle could be approaching its final phase.

Strong support zone strengthens technical case

Bajaj Broking believes ITC's technical structure has improved as the stock trades near a key support band between ₹270 and ₹290. The brokerage noted that the zone represents the confluence of multiple technical indicators that have historically provided support for the stock.

"ITC stock price has undergone a corrective phase over the past 21 months and is currently consolidating near a crucial support zone. This technical setup offers a favorable risk-reward profile, positioning the stock for a pullback in the coming months."

According to the report, the support area is reinforced by the 61.8% retracement of the previous rally from ₹190 to ₹485, the 200-month exponential moving average (EMA) positioned around ₹260, and the previous breakout zone between ₹260 and ₹280, all of which strengthen the probability of the support holding.

The brokerage also highlighted improving momentum indicators. It said the monthly stochastic oscillator has rebounded from oversold territory and generated a buy signal, supporting a positive bias for the stock.

Based on these technical signals, Bajaj Broking expects ITC to move towards ₹330, which coincides with the February 2026 high and the 23.6% retracement of the entire decline from ₹485 to ₹275.

"The monthly stochastic has also rebounded from oversold territory and has generated a buy signals thus supports positive bias. We expect the stock to head higher towards 330 levels being the confluence of the high of February 2026 and 23.6% retracement of the entire decline from 485 to 275."

The brokerage concluded that the ongoing base formation near the long-term support area offers investors a fresh entry opportunity with a favourable risk-reward setup, making ITC one of its preferred technical picks for the next six months. The accompanying monthly chart in the report also highlights the formation of a base near the ₹270-290 zone alongside the rebound in the monthly stochastic indicator, reinforcing the brokerage's positive outlook.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.