As we approach Diwali, the stock market is under pressure due to several geopolitical and economic factors, particularly the Israel-Iran tensions and the China stimulus package announcement. The impact of Foreign Institutional Investors (FIIs) withdrawing from Indian markets and redirecting their investments to China has caused significant selloff volatility, leaving the Indian stock market in a state of panic.

However, according to my research, this market correction has led to an oversold scenario, paving the way for a potential short-term bounce back. We anticipate this bounce back will occur towards the end of the month, coinciding with the festive season of Diwali.

To capitalize on this opportunity, I have crafted a Diwali stock portfolio featuring six momentum stocks. Each of these stocks is part of the Nifty 200 Momentum 30 index Fund, a collection of trending momentum stocks. My Diwali Picks represent a carefully curated selection of stocks that I believe will experience a 5-7% upside over the next 15 days.

Market Overview as of 18th October 2024:

• BSE Sensex: Closed 218.14 points (0.27%) higher at 81,224.75


• NSE Nifty 50: Gained 104.20 points (0.42%) to end at 24,854.05


• Banking stocks: Led the rally, with the Nifty Bank index surging 1.57% and Nifty Financial Services climbing 1.50%


• Top Gainers: Axis Bank (+5.75%), Wipro (+3.59%), Eicher Motors (+2.98%), ICICI Bank (+2.90%), Shriram Finance (+2.80%)


• Top Decliners: Infosys (-4.22%), Britannia (-1.98%), Asian Paints (-1.87%), Nestle India (-1.21%), Tech Mahindra (-0.82%)

Key Market Insights:

Despite a lower opening, the market exhibited resilience, with Nifty recovering from a low of 24,567. Positive earnings results from private banks contributed to the rally, fueling optimism for the upcoming financial results. The market breadth remained slightly negative, with 1,993 declining stocks against 1,942 advancing. Notably, 213 stocks hit their 52-week highs, while 52 touched their 52-week lows.

While many experts predict resistance around the 25,128 mark for Nifty and support at 24,568, my analysis suggests that my Diwali stock picks have the potential to rally by 5-7% in the short term.

My Diwali Picks: Short-Term Momentum Portfolio

I have invested ₹6 lakhs evenly across the following six stocks, allocating ₹1 lakh per stock. Here's my portfolio for short-term returns leading up to Diwali:

NTPC Ltd.
• -> Sector: Energy
• -> Current Price: ₹425.1
• -> My Entry Price: ₹424.95
• -> Momentum Reason: With energy demands increasing and NTPC's strong fundamentals, I expect a potential short-term surge in its stock price.

Bharti Airtel Ltd.
• -> Sector: Communication
• -> Current Price: ₹1702
• -> My Entry Price: ₹1707.85
• -> Momentum Reason: The telecom giant remains a solid performer, and with growing data consumption, I foresee a bounce-back in this stock.

Coal India Ltd.
• -> Sector: Energy
• -> Current Price: ₹491.05
• -> My Entry Price: ₹492.20
• -> Momentum Reason: As one of the key players in the coal and energy sector, Coal India is positioned to benefit from market recovery and the ongoing energy demand.

Indus Towers Ltd.
• -> Sector: Communication
• -> Current Price: ₹384.4
• -> My Entry Price: ₹384.55
• -> Momentum Reason: The communication infrastructure provider is crucial in the expanding digital landscape, making it a promising short-term bet.

Punjab National Bank
• -> Sector: Financial
• -> Current Price: ₹103
• -> My Entry Price: ₹103.27
• -> Momentum Reason: Banking stocks have led the market rally, and PNB’s strong fundamentals make it a prime candidate for short-term gains.

Zydus Lifesciences Ltd.
• -> Sector: Healthcare
• -> Current Price: ₹1021
• -> My Entry Price: ₹1022.45
• -> Momentum Reason: With healthcare stocks showing resilience, Zydus Lifesciences is expected to ride the wave of recovery, particularly given the rising demand in the healthcare sector.

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Disclaimer: This article is based on my personal research and market insights. Please perform your own analysis or consult a financial advisor before making investment decisions. Happy Diwali and Happy Investing!