Hello Guys, I hope you are doing good. A festive session is going on, I wish you a happy festive session. In today’s Stock Market Analysis with top 5 Diwali Picks to invest post, I will share some of the stocks I picked for investment for long term prospectives.
Diwali is a festival for good investment decisions. In Mahurat trading, Investors are willing to invest some good scripts for a decent return in the coming year.
For my investment decisions, I prefer to invest in some fundamentally strong scripts with good technical breakouts. Although I’m not that good in fundamentals, just looking on some important ratios like Debt: Equities ratio, Return on Equity, Return on Capital Employed, book value, PE Ratio and PB Ratio.
Technical Analysis is my favourite topic that’s why Giving more importance to technical breakouts in this Stock Market Analysis with Diwali Picks. So if a stock is good on my fundamental scanner and giving good technical breakouts I prefer that script only.
In this Diwali Picks and Market Analysis post, I will share some of my Diwali picks based on techno-funda Scanner. Before going further lets us look at the market. Where we are standing and what we can expect in the coming year.
Stock Market Analysis:
This is the weekly chart of NIFTY 50 INDEX, You can see we are in an Uptrend for long term. Whenever nifty took support on the lower channel line, we saw a good upside rally in the near term.
On 19th April, Nifty gave a breakdown but couldn’t sustain and we saw a sharp recovery from lower levels. In the last couple of weeks, we saw a very huge movement in both directions with weak sentiments.
Globally as well as domestic factors are creating weak sentiments in the market. But the inflow we saw in equity through Mutual funds indicates that still, people believe in India’s growth story.
And if you look at the long term chart, the same thing we can see on charts too. Long term trend is supper bullish and we’ll get a very good return in the coming year through the equity market.
This is the right time to invest in some good scripts because some of the good scripts are trading at very good valuations. Although overall valuations are still high because Nifty PE is trading at 26.70, which indicates a high valuations in the market.
This is an important reason. We saw some good recovery in the market but still, there is no value buying coming which will give strong support and will boast the sustainable recovery in the market.
As you know, When we talk about long term investment, every time is the best time to invest. We are looking at short term fluctuations but long term trend absorbs all the short term fluctuations.
Top 5 Diwali Picks to invest
In this Stock Market Analysis and Top 5 Diwali picks to invest post, I took some scripts based on a scanner. I run a scan based on the following Fundamental parameters:
- Market Capitalization should be greater than 3000 Cr
- The average return on equity for last 5Years is greater than 20
- Debt to equity ratio should be less than 1.5
- Interest Coverage Ratio should be greater than 2
- PEG Ratio is equal or less than 1
- Profit growth for 5Years is greater than 20
This scanner is freely available on screener.in
From the list I got from the scan result, I choose some of the scripts which are good on other parameters too and giving good buy signal on Charts.
HCL TECH (CMP:1134)
HCL TECH is an IT company, primarily engaged in providing a range of software development services, business process outsourcing services and IT infrastructure services. Financial Ratios are looking good.
- HclTech is virtually debt-free.
- Company has good consistent profit growth of 20.01% over the last 5 year
- HCL Tech has a Good Return on Equity (ROE) track record: 3 Years ROE 26.21%
- Company has been maintaining a healthy dividend payout of 23.19%
Technically HCL TECH is trading in its 52 week High Zone. The trend is Up and Giving Good breakout with a target of 1240.
Petronet LNG is primarily to develop, design, construct, own and operate a Liquefied Natural Gas (LNG) import and regasification terminals in India.
- Company has reduced debt.
- Petronet is virtually debt-free.
- Stock is providing a good dividend yield of 3.69%.
- Company has good consistent profit growth of 25.06% over 5 years
- Company has been maintaining a healthy dividend payout of 41.35%
Petronet LNG giving a good breakout on Daily chart. Overall Trend is UP. Good candidate our investment pick. Expected target 300+.
Avanti Feeds (CMP: 440.90)
Avanti Feeds is engaged in the business of exporting Shrimp. AFL, AFFPL and SEIPL are hereinafter referred to as the Group.
- Company has reduced debt.
- Company is virtually debt-free.
- Promoter’s stake has increased
- Company has a good return on equity (ROE) track record: 3 Years ROE 36.91%
- Company has been maintaining a healthy dividend payout of 17.02%
Avanti Feeds looking very good on Charts. Giving good Breakout around 410. 410 – 440 is a good entry zone with a stop loss of 375 for a target of 520
Minda Industries (CMP:365)
Minda Industries is engaged in the business of manufacturing of auto components including auto electrical parts and its accessories and caters to both domestic and international markets.
- Company has good consistent profit growth of 117.89% over 5 years
Overall Trend is UP in Minda Ind. Giving Good breakout. Looking good for a target of 400+. You can keep a stop loss below 335.
Ashok Ley ( CMP:74.70)
Ashok Leyland is a holding company. The Company is engaged in commercial vehicles and related components. Through its subsidiaries, it is engaged in manufacturing and trading in Medium and Heavy Commercial Vehicle, Light Commercial Vehicles, Passenger vehicles, automotive aggregates, vehicle financing and engineering design services
- Company has reduced debt
- Ashok Ley is virtually debt-free.
- Stock is providing a good dividend yield of 4.15%.
- Has good consistent profit growth of 43.55% over 5 years
- ASHOKLEY has a good return on equity (ROE) track record: 3 Years ROE 25.45%
- Company has been maintaining a healthy dividend payout of 41.20%
Ashok Leyland is looking good for Long term investment purpose. Taking support on lower levels and trying to giving a good breakout. Above 75, we may see 90+ but the trend is still weak so keep a small stop loss of 70.
*Data Source – screener.in
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DISCLAIMER: – we are not a SEBI research analyst. Views posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods. This information should only be used by investors and traders who are aware of the risk inherent in securities trading.