Diwali technical stock picks: Buy these 4 shares in Samvat 2077; charts signal up to 28% rally

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Research and brokerage firm HDFC Securities has picked four technical diwali stocks for Samvat 2077, with investment period till next year’s Diwali.

Indian share markets are gradually scaling back to pre-covid level, with BSE Sensex and Nifty 50 trading at over eight-month highs. A host of domestic and global factors have been keeping the headline indices volatile. Research and brokerage firm HDFC Securities has picked four technical Diwali stocks for Samvat 2077, with investment period till next year’s Diwali. The stocks belong to auto parts and ancillary, bank and oil & gas space. In today’s session Sensex was hovering near 41,500 and Nifty 50 was testing 12,150 level. The brokerage firm has observed improvement in these sectors in the post COVID-19 era and expects them to do well in Samvat 2077. 

Amara Raja Batteries: The brokerage firm has a buy rating to the stock, with a target price between Rs 890 and 940, implying an up to 17 per cent rally. It has advised a buying range of Rs 789.75-800 apiece. Amara Raja Batteries has broken out from the downward sloping trend line on the monthly chart. The auto sector has been outperforming for the last many months. Nifty Auto is looking strong on the medium to long-term charts. HDFC Securities has recommended to buy Amar Raja batteries, keeping a stop-loss on a closing basis at 640.

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Axis Bank: After a sharp decline in September 2020, Axis Bank has witnessed an excellent upside bounce in the subsequent month of Oct-20. Analysts at HDFC Securities said that the stock price is making an attempt to move above the multi-month hurdle of Rs 520-530. As per its range movement of 30-60 levels, the monthly RSI is expected to move up to 60 levels (from the current reading of 47). “We recommend buying Axis Bank Ltd at CMP and average at 475, for the upside targets of 590 and 640, keeping a stop-loss on closing basis at 448,” it said. the pegged target price offers over 18 per cent rise in the stock price.

CEAT: The brokerage firm has recommended to buy the stock at 1100-1130 and average at 1000, for the upside targets of 1230 and 1425, keeping a stop loss on closing basis at 922. It will CEAT stock to jump 28.4 per cent to touch the target price. From April to Sep 2020, volumes rose along with the gradual price rise. In October 2020, the stock price rose with momentum and broke out from the long-term resistance. The Auto sector has done exceptionally well since March 2020 bottom. “Auto Ancillary space is also expected to continue their outperformance in the coming months,” the report noted. 

HPCL: HDFC Securities has given a buy rating to Hindustan Petroleum Corporation Ltd stock for the upside targets of 210 and 223, keeping a stop-loss on closing at 166. The report highlighted that positive divergence is witnessed on RSI and SMI indicators on a monthly time frame which suggests prices could move higher in the near-term. The brokerage firm sees nearly 9 per cent gain in the stock price.

(The stock recommendations in this story are by the respective research and brokerage firm. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)

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