5 stocks to bet on during Diwali week

The domestic equity indices found their mojo back in the week gone by, with the Nifty50 scaling a fresh all-time high on Friday. The Sensex climbed 250 points to settle the session at 32,433 while the broader Nifty50 index scripted history, hitting a record peak, surpassing its previous high of 10,179 and settling at an all-time closing high of 10,167, up 71.05 points.

Let's check out five stocks which are likely to gain in the coming week:

After marking its high at 1,450, the stock has been under corrective decline and a broad consolidation.

The Daily MACD stays bullish and is in continuing buy mode. The Daily RSI is neutral and has formed a higher bottom after a decline and is inching upwards. On the Weekly Charts, a fresh buy signal over Stochastic has emerged with a bullish divergence. We can expect buoyancy to return in coming days.

This stock qualifies for a technical pullback. From 314 levels, the stock has been in corrective decline. After dipping below 200-DMA, a hammer has emerged followed by a strong white body on Candles. This formation is significant as it has emerged near strong support area of 200-DMA.

Daily MACD is sharply moving towards positive crossover. A Candle with a long lower shadow has emerged on Weekly Charts near the support area. It remains oversold on Weekly Stochastic and in continuing buy mode on Daily Stochastic.

A broad ascending triangle is seen on this stock which has developed over last 3 months. After attempting a breakout, the stock suffered a 100% throwback and returned to the levels from which it achieved the breakout. A similar ascending triangle formation is observed on Weekly Charts as well and the stock is seen readying for a serious breakout.

RSI on the Weekly charts is bullish marking a fresh 14-period high. MACD remains in continuing buy mode.

After forming highs around 1100, the stock remained sideways in a rectangular formation for a long time before dipping further. Recently, the stock took support at its 200-DMA and it qualifies for a likely technical pullback.

While remaining in continuing buy mode on MACD, the stock ended above its short term 20-DMA. On the Weekly Charts, a fresh buy signal has emerged over Stochastic with a bullish divergence against the price. While the stock corrected, OBV did not decline and this is bullish indication. An engulfing bullish candle has emerged on the Weekly Charts near strong support area which indicate some upward revision in prices over coming days.

This stock is due for a major breakout on the upside after a prolonged formation in a limited trading range.

On the Weekly Charts as well, the Stock has encountered a major Double Top formation, accumulated around those levels and has attempted a breakout. The stock remains oversold on Daily Stochastic. On the Weekly Charts, a fresh buy signal has emerged as the Weekly MACD has reported a positive crossover. It is now bullish trading above its signal line. Daily RSI is neutral but has made a higher high and is inching upwards.

(Milan Vaishnav, CMT, is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodrara. He can be reached at milan.vaishnav@equityresearch.asia)