ICICI Bank Shares Set for a Potential Rally: Historical Patterns and Upcoming Earnings

Synopsis : ICICI Bank shares, down 3% in October so far, are expected to rebound based on historical seasonality and technical patterns. The stock has a history of delivering strong October returns, and with its Q2 results due on October 26, analysts predict a net profit rise of 6.7%. Technical indicators suggest a bullish trend, with targets set at Rs 1,380 in the near term, supported by possible short covering and positive financial performance.

ICICI Bank has been down 3% in October 2024, with its share price currently trading around Rs 1,235 as of the latest updates. However, market analysts suggest that the stock may be poised for a potential rally in the coming days, driven by historical seasonality and upcoming financial results.

Historically, ICICI Bank has shown strong performance in October, delivering gains in nine of the past 10 years, with an average return of 8%. This trend, coupled with its current technical setup, has investors optimistic. The stock recently dipped from a high of Rs 1,362 to Rs 1,225, but has begun consolidating around its 50-day Exponential Moving Average (EMA), signaling a possible rebound. Neeraj Agarwal from JM Financial predicts the stock could touch Rs 1,380 in the near term, with short-covering likely to contribute to the upward momentum.

From a technical perspective, ICICI Bank has maintained support above its 100-day EMA, which is currently at Rs 1,205, and has formed a bullish "higher top, higher bottom" pattern. This would only be negated if the stock closes below Rs 1,153.

Looking ahead, the bank is set to announce its Q2 FY24 results on October 26. Axis Securities forecasts a 6.7% year-on-year growth in net profit to Rs 10,945 crore, driven by higher provisions and stable net interest margins (NIMs), which are expected to grow by 9.6%. Analysts also anticipate no major challenges regarding asset quality, which should keep credit costs under control. Provisions are expected to double year-on-year to Rs 1,410 crore, indicating cautious provisioning by the bank.

On the futures and options front, the open interest has surged by 43%, mostly on the short side. This setup suggests that any positive movement in the stock price could trigger a wave of short covering, further driving the stock upwards.

Disclaimer : The information provided is for educational purposes only and should not be considered as investment advice. Stock market investments are subject to risks, and it is advisable to consult a financial advisor before making any investment decisions.