Samvat 2074 was largely impacted by subdued investor sentiment and diminishing foreign inflows, while the Sensex and the Nifty remained nearly flat. The broader indices followed suit and underperformed, with key composites such as the Nifty Midcap and Smallcap falling nearly 9% and 30%, respectively.
On the sectoral front, Realty and Auto stocks hogged the limelight, while IT and FMCG stocks performed poorly. Overall, it turned out to be a negative year for most sectors.
The Indian market moved into a Confirmed Uptrend ahead of the Diwali festival. We believe this to be a good signal for a strong start to Samvat 2075. Q2 FY 2019 earnings season was mixed and a few sectors such as IT, Pharma, FMCG, and Banks reported strong earnings. It is a good time to buy stocks that are breaking out on earnings.
While there are many good quality names out there, we, at SwingTrader India, have short-listed a few stocks as our top picks for Muhurat Trading this Diwali.
Sterlite Technologies: The stock has very strong fundamentals, with 84% y/y EPS growth and 39% y/y revenue growth. The Company has a strong order book and is a direct beneficiary of various 5G projects. Though it is a stock that investors would like to have it in their portfolio for the long-term, traders could also make some quick gains on it this Diwali, as the stock looks technically strong. It is trading above its key moving averages and thus a position could be initiated between Rs 373- 381. The short-term target for this scrip is Rs 415 while stop loss is to be maintained at Rs 353.
Bajaj Finance: The Company posted strong Q2 FY 2019 results with sales and EPS growth of 41% and 48%, y/y. It is technically trading ~3% below its 50-DMA and a position could be taken once it crosses Rs 2,440. Buy within Rs 2,440-2,465. Book profits at Rs 2,740 and maintain stop loss at Rs 2,350.
HEG: The stock is moving sideways for the last few weeks and shows strong support at its 50-DMA. It could be purchased within the buy range Rs 4,200-4,290. Hold for the target of Rs 4,625 and maintain stop loss at Rs 4,000.
Automotive Axles: The stock is trading marginally below its 50-DMA and has reversed its trend over the last few weeks. It posted strong Q2 FY 2019 earnings recently and since then, it is in an up move. We recommend buying this stock in the range of Rs 1,270-1,295, for a target of Rs 1,376. Maintain stop loss at Rs 1,180.
Nestle India: The Company is a major player in the Indian FMCG industry. In the recent Q2 FY 2019 earnings, it beat consensus estimates by a huge margin. The stock looks technically strong currently as it retook its 50-DMA and its 5-EMA is above its 20-EMA, which confirms the bullish trend. Thus, a position could be taken between Rs 10,115-10,100. The target for this scrip would be Rs 10,500 while stop loss is to be maintained at Rs 10,090. However, long-term investors can hold this stock for a target of Rs 11,500.