On January 15, 2024, the stock market is abuzz with the potential of large-cap stocks as they continue to show promising signs. With the valuation differentials between mid and large-cap stocks increasing sharply over the past year, there is a possibility of a mean reversion trade in the near future.
Refinitiv’s Stock Report Plus, powered by ET screener, has identified quality stocks with significant upside potential over the next 12 months, garnering an average recommendation rating of ‘buy’ or ‘strong buy’.
Amidst recent market corrections, sectoral rotation has been observed, which is a common occurrence during bull runs. Investors are advised to consider fresh investments in large-cap stocks as they are likely to weather corrections more resiliently.
During periods of strong bullish bias, some stocks may temporarily fall off algorithm-based buying lists, only to reappear once the market corrects. Notably, stocks like HDFC Bank and ICICI Bank have reemerged on the list, signaling renewed potential upside.
The methodology used for filtering the list of stocks involves selecting those with a minimum of 10 analysts projecting a minimum upside potential of 15%. Additionally, stocks with price targets provided by at least 10 analysts are chosen, and the average price targets for all selected stocks are calculated and compared with the current market prices.
