Diwali technical stock picks: Buy these 5 shares for up to 30% rally in 3 months in Samvat 2077

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As Diwali 2020 is around the corner, Kotak Securities has prepared a list of five stocks, ranging from pharmaceuticals to bank stocks to IT stocks, with a three-month investment horizon

Indian share markets rebounded sharply from March lows, and are now back to pre-COVID levels. Nifty 50 has rallied over 60 per cent from its 52-week low of 7511. Shrikant Chouhan, Executive Vice President (Equity Technical Research), Kotak Securities, said that index is in the third leg of major corrective pattern and is correcting after hitting the psychological mark of 12000.

As Diwali 2020 is around the corner, Kotak Securities has prepared a list of five stocks, ranging from pharmaceuticals to bank stocks to IT stocks, with a three-month investment horizon. Chouhan believes that until the market is above the level of 10800, the Nifty 50 index would keep rallying. While below 10800 levels Nifty would lose its momentum and may even fall to 10300 levels. A decisive crossing of 12400 levels would lift the Nifty to 13300 levels.

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Infosys: Shrikant Chouhan has advised to buy 50 per cent stocks at Rs 1,097 and rest at Rs 960 apiece with a target of Rs 1,400 and stop loss of Rs 850. It will take Infosys to jump 28 per cent to hit the target price. The stock has formed a strong breakout continuation pattern and weekly charts suggest an uptrend wave likely to continue in the medium term. The strategy should be to keep buying on dips at crucial supports. On the upside, the next wave should end between 1400/1440.

Cipla: Kotak Securities in its Diwali special technical picks noted to buy 50 per cent Cipla shares at Rs 778 and balance at Rs 700 apiece. It has pegged a target price of Rs 840, implying an upside of 7.5 per cent from the previous close with a stop loss of Rs 650. The stock is forming a ‘Cup with Handle’ formation on monthly charts. On the upside, it could move to 840 levels.

Britannia Industries: The report noted that it is into a fresh technical break out on long term charts. Currently, it is into throwback mode to retest earlier major resistance. One can buy 50 per cent at current levels and balance at 3200. Keep a final stop loss at 3000. On the upside, the rally could extend up to 4000. It has given a target price of Rs 4050, an upside of 16.74 per cent.

ICICI Bank: On the technical charts, ICICI Bank stock fell vertically during the COVID-19 induced nationwide lockdown. The stock was at Rs 550 in February 2020 and fell to Rs 268 by the end of March this year. “Technically, it is gradually pull back on the upside and we could expect 480 in the near term from it,” Shrikant Chouhan said. One can buy 50 per cent stocks at current levels and balance at 375 with a final stop loss at 350. On the upside, the rally could extend up to 480. ICICI Bank will have to jump 14.35 per cent to touch the target price of Rs 500.

Dalmia Bharat: The entire cement sector is showing the signs of recovery with a pick-up in demand. Dalmia Bharat is moving upward with a frequent consolidation, which is bullish for the stock. “Technically, after crossing the crucial level of 920, it would arrest only at 1075, an upside of 30 per cent. Buy 50 per cent at current levels and balance at 770. Keep a final stop loss at 700. On the upside, the rally could extend up to 1075 levels.

(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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