Diwali stock picks: Ready for Muhurat trading? Analysts recommend over 60 scrips for Samvat 2078

It has been a good year for Dalal Street. As investors gear up for the special, one-hour 'Muhurat' trading session this Diwali on November 4, brokerages have shared their top recommendations to make most of Samvat 2078 - the year that begins on the day of Diwali.

From Diwali 2020 to Diwali 2021, the 30-strong Sensex index has given a return of close to 40 percent, breaking a chain of records along the way in a liquidity-driven run.

Analysts say optimism on the long-term prospects of the economy has propelled the headline indices journey to new heights, however near-term challenges in the form of high valuations, supply constraints and high input costs remain.

Here are analysts' top stock picks for Diwali 2021:

The brokerage has recommended accumulating six technical picks from a one-year perspective:

(Read more on HDFC Securities' top picks)

The brokerage recommends 12 stocks this Diwali, spanning spaces such as chemicals, pharmaceutical, banking, FMCG, gas and media. It has recommended a Diwali portfolio estimated at Rs 46,346:

The brokerage has handpicked five technical and derivatives calls for the next 2-3 months, with an upside potential of 19-3 percent:

SBI: The rollover has been intact at 93 percent for the past two months, indicating that longs are upright with a more than 10 percent price increase in the October series. One can look for a bull call spread opportunity by buying the Rs 510 call and selling the Rs 540 call of the November series at a net premium cost of around 10 points.

L&T: The maximum call open interest is at the strike price of Rs 1,900, and the highest call writers unwinding at this level are making a comfortable upside. Short covering seen in the October series will drive the stock to higher levels. One can initiate a bull call spread by buying the Rs 1,820 call and selling the Rs 2,000 call of the November series at a net premium cost of around 40 points.

Trent: A new entrant in the F&O segment, Trent has seen the open interest increase by more than 36 percent, suggesting increasing long positions.

Bata: Short covering is seen with an increase in price by almost 18 percent in the October series. An increase in implied volatility suggests bulls are in action.

Tech Mahindra: The decline in open interest by almost nine percent with an increase in price suggests short covering. The rollover of 97 percent in the previous series suggests a positive sentiment and strong hands on the counter.

The brokerage has recommended 12 stocks with an upside potential of 32-55 percent from a 12-month perspective:

The brokerage has recommended 11 stocks with an upside potential of 28-52 percent:

Samco has suggested investing in 10 stocks as part of its "Diwali rocket portfolio", which it believes has a potential upside of 15 percent.

These stocks are Metropolis, Asian Paints, ICICI Lombard, CAMS, Dabur, Rossari Biotech, HDFC Bank, Affle India, Relaxo Footwear and LIC Housing Finance.

The brokerage recommends nine stocks this Diwali: