ICICI Bk: 245-255 Zone May Be A Big Hurdle, Even If RBI Comes With A "Bazooka"

Looking at the chart, ICICI need to sustain above 245-255 zone for an immediate target of around 265-270 & 280-295-301 zone in the near term.

On the flip side, sustain below 245-240 zone, ICICI may fall towards 230-223-215 & 203-195-180 zone again in the short to medium term.

Trading Idea: ICICI Bank

CMP: 239

Either sell below 245 or in rise around 255-270;

TGT: 230-223-215*-203-190-180* & 160-145 (1-3/6M)

TSL> 280

Note: Consecutive closing (3 days) above 280 for any reason, ICICI may further rally up to 295-301* & 310-320* and 335-355-395*-425 in the near to long term (alternative bullish case scenario).

All eyes will be on the RBI today and if RBI comes with a 0.25% rate cut ("Water Pistols"), then market may be heavily/moderately sold off. For 0.50% rate cut ("Bazooka), market may be already discounted it to a great extent and we may see an initial whipsaw movement (may be 200 points in BNF or 7885 zone in NF) and then sold off.

Market will rally up to 8000-8200, if RBI surprise us with a 0.75% rate cut today (though very little probability).

Apart from rate cut, some of the issues to which analysts will look :

1. Liquidity issues with banks

2. Commentary of RBI Gov (hawkish/dovish/further rate cut cycle)

3.Global/Fed cues

4.Rate cut transmissions by banks

5.Inflation outlook/projections/monsoon/7PC effect

6. NPA issues/AQR/Recapitalization of PSBS

For ICICI Bank:(Standalone)

Q3FY16 TTM EPS: 20.43

Projected FWD EPS: 20.59-23.45-27.05

Average PE: 15

Valuation as par BG metrics & current market scenario:

Current median valuation may be around: 275 (Q3FY16/FY-16)

Projected fair valuations might be around: 295-315 (FY:17-18/FWD)

SCRIP	EPS(TTM)	BV(Act)	P/E(AVG)	Low	High	Median	200-DEMA	10-DEMA
ICICIBANK	20.43	138.32	15	279.85	266.69	273.27	255.55	232.09

ICICIBANK

20.59

151.5

15

280.94

267.73

274.34

255.55

232.09

ICICIBANK

23.45

165.85

15

299.82

285.72

292.77

255.55

232.09

ICICIBANK

27.05

181.75

15

322.01

306.87

314.44

255.55

232.09

Analytical Charts: