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Top Diwali 2021 stock picks: Buy these 6 shares for as much as 47% rally in one-year


From the next 12 months perspective, the brokerage firm is positive on banks, FMCG, housing finance, defence, engineering, and auto sector. Image: Pixabay

Indian share markets were ruling at record high levels, adding nearly 30 per cent higher so far this year. As we enter Samvat 2078, markets have once again scaled to a new high, with BSE Sensex above 62,000, and Nifty 50 over 18,600 levels. Nifty has gained 41.55 per cent since last Diwali to date. Research and brokerage firm Anand Rathi Share and Stock Brokers has picked up six stocks as Diwali 2021 picks. From the next 12 months perspective, the brokerage firm is positive on banks, FMCG, housing finance, defence, engineering, and auto sector. The stock recommendations were based upon strong technical patterns from the universe of NSE F&O and cash counters.

Stocks to buy

IDFC First Bank
Buy, Entry range: Rs 49-45, Stop loss: Rs 37, Target 1: Rs 57, Target 2: Rs 67, Upside: 39%

The brokerage firm noted that after the breakout in the month of Jan 2021, the stock again retested that breakout zone and is now moving higher. During the process, the stock has managed to sustain above its 100 week’s EMA which indicates strength. It has advised investors and traders to buy the stock with a time frame of around one year.

ITC
Buy, Entry range: Rs 250-240, Stop loss: Rs 200, Target 1: Rs 290, Target 2: Rs 335, Upside: 36%

On the monthly chart, ITC showed that after a corrective move of the year 2020, the stock finally managed to cross its 100 month’s EMA. The research firm highlighted that there is a trend line breakout which indicates fresh upside. “We are also observing a bullish flag kind of formation on a smaller time scale,” it said. With regards to monthly RSI, Anand Rathi Share and Stock Brokers said that the indicator is on the verge of a breakout from 60 levels which could bring in more strength going ahead.

LIC Housing Finance
Buy, Entry range: Rs 450-430, Stop loss: Rs 350, Target 1: Rs 530, Target 2: Rs 620, Upside: 43%

Anand Rathi Share and Stock Brokers said that the multi-year chart of LIC Housing Finance depicts that most of the time 350 zone has been acting as a strong demand point for the counter. At this juncture, the stock is convincingly trading above the same. The stock has managed to close above its 100 WEMA and has confirmed a double bottom formation on the weekly scale, the brokerage firm added. “After a stupendous rally in realty space we expect the traction to get shifted to housing finance space,” the brokerage firm added.

Mazagon Dock Shipbuilders
Buy, Entry range: Rs 265-255, Stop loss: Rs 220, Target 1: Rs 300, Target 2: Rs 340, Upside: 30%

Anand Rathi Share and Stock Brokers does not have much historical data for the Mazagon Dock Shipbuilders stock, but it said that the company’s peers such as Bharat Electronics Ltd and Bharat Dynamics are doing very well with regards to price action. “Technically, the stock has surpassed the middle line of the weekly rising channel which indicates it is heading towards the upper end,” the brokerage firm said.

Rail Vikas Nigam
Buy, Entry range: Rs 34-30, Stop loss: Rs 24, Target 1: Rs 40, Target 2: Rs 48, Upside: 47%

Anand Rathi Share and Stock Brokers said that the weekly chart has confirmed a bullish FLAG pattern breakout which has a theoretical target of around 50. “The recent price action was supported by exceptional volumes which indicates that the stock is poised for fresh upside,” it added.

TVS Motor Company
Buy, Entry range: Rs 584-576 Stop loss: Rs 480, Target 1: Rs 680, Target 2: Rs 780

The brokerage firm noted that the weekly chart of TVS Motor showed that in the first half of year 2021 the stock confirmed a range breakout above 500 mark. The theoretical target for the breakout comes around the life time high of the stock which is near to 790. “Most of the other technical parameters are positively placed which indicates a low risk buy for a few months,” Anand Rathi Share and Stock Brokers, said.

(The stock recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

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