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IT stocks have undergone healthy retracement within the structural up move. Many quality stocks have undergone healthy price/time correction and are available as a favourable risk-reward proposition, as per brokerage house ICICI Securities. 

The brokerage believes that midcap IT stocks like Info Edge India and Birla Soft are expected to catch up with their large cap peers. It has Buy rating on both the IT stocks with time frame of up to three months.

Info Edge: "The stock has undergone healthy retracement over the past five months after witnessing relative outperformance during CY21. It is seen resuming its primary up trend, thus offering a fresh entry opportunity with a favourable risk reward set up," the brokerage stated. 

It has a Buy rating on Info Edge shares with target price of 5,380, keeping a stop loss of 4,315 with time horizon of up to three months. “Among oscillators, the weekly 14 period’s RSI has rebounded from the extreme oversold territory and generated a buy signal moving above its nine period’s average, thus supporting the positive bias," it added.

Birlasoft: “The stock, after a stupendous rally in CY21, witnessed profit booking in the first two month of the current year. Currently, buying demand is seen emerging from the major support area rs 410-430 as it is the confluence of the rising 52 week’s EMA and the lower band of the previous major consolidation area of July-October 2021 as can be seen in the adjacent chart, thus signalling a favourable risk-reward set-up," ICICI Securities highlighted.

The brokerage expects the midcap IT stock to continue its current up move and head towards 524 levels in the coming months with keeping a stop loss of 414.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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