Diwali Picks: Late American Stockbroker William O'Neil's Market Rules Can Increase Chances On Winning Big?

Muhurat Trading 2023: The policy and other economic indicators impact the market, but if you play by the rules of O'Neil, your chances of winning are high, said the Willion O'Neil India's research note. According to the brokerage, last Diwali, the Indian market began to gather momentum and shortly after the festival of lights, Nifty embarked on a remarkable rally, soaring to an all-time high in November 2022.

Ahead of the Muhurat Trading 2023, the brokerage's note also pointed out that "All the seven stocks that we picked for last year's Diwali, performed exceptionally well, delivering positive returns. Our overall portfolio saw an impressive 45% return, outperforming Nifty, which was up 11%, and Midcap and Smallcap stocks, which yielded 30% and 36% returns, respectively."

For Samvat 2080, the brokerage said, "The market's information is much more reliable than anything put out by news and expert opinions. As we begin Samvat 2080, monitor resilient sectors in the weak market and are holding with good relative strength. Once Nifty stages a follow-through day, look for stocks showing traits of a leader. Be disciplined to invest in perfect sync with the market. We will continue to follow the O'Neil rules and screen for names that meet our profile."

The brokerage has recommended buying 6 stocks including Axis Bank, Hindustan Aeronautics, and RailTel. Here's what Willion O'Neil's views are:

Axis Bank:

The stock is currently forming the right side of a stage-one flat base and trading above all key moving averages. It is important for the stock to break out on above-average volume. The ideal buy range is Rs 1,048-1,100. It has an EPS Rank of 90 and the RS line is trending higher.

Axis Bank, India's third-largest private sector bank, offers a full range of financial services to various customer segments, including large- and mid-sized companies, MSMEs, agriculture companies, and retail players.

Bikaji:

The stock is forming a stage-one cup base with a pivot of 533. The ideal buy range: is 533-560. The company has a strong fundamental profile: EPS ranks 98 and ROE of 13%.

Also, the stock has an RS Rating of 65 and an A/D Rating of B. Additionally, institutional sponsorship increased by 11.4% y/y.

Bikaji is currently the third-largest ethnic snacks company in the country. It is among the fastest-growing companies in the segment. Apart from snacks, Bikaji is the third-largest player in sweets and the second-largest papad maker in India.

Sanghvi Movers:

The stock broke out of a stage-three consolidation base and is currently trading near its pivot. The ideal buy range: is 756-794. The company has a strong fundamental profile: EPS Rank of 74 and ROE of 13%. Also, the has an RS Rating of 92 and an A/D Rating of B+, while institutional sponsorship increased by 39.5% y/y.

Sanghvi Movers is the largest crane rental company in the country and Asia and the sixth largest in the world. Currently, it has a fleet of 400 medium to large-sized heavy-duty telescopic and crawler cranes ranging from 40-1,000 MT.

RailTel:

The stock is currently forming a stage-two consolidation base and is just 3% from its pivot. The company has a strong fundamental profile: EPS ranks 87. Also, the stock has an RS Rating of 89 and an A/D Rating of A+, while institutional sponsorship increased 31% q/q.

RailTel is a central public sector enterprise and a "Mini Ratna (Category-I)" company. The company has a strategic relationship with the Indian Railways and it undertakes various projects from Railways.

Ethos:

Going forward, the pre-owned watch market is expected to outpace the first-hand market, with online sales leading the way. The company is the only organized player in India capable of certifying, buying, and restoring pre-owned watches. Ethos Watches is the largest chain of luxury watch boutiques in India. It is an authorized retailer with more than 60 luxury watch brands.

The stock is currently forming a stage-three (c) flat base and is trading near its pivot. The company has a strong fundamental profile: EPS ranks 94. Also, the stock has a good RS Rating of 79 and an A/D Rating of B+, while institutional sponsorship grew 9% in the recent quarter.

Hindustan Aeronautics:

Under the initiative of "Atmanirbhar Bharat", the government is relying on HAL to reduce the defence imports and dependence on foreign companies. Various other government initiatives have given thrust on the indigenization and indigenous procurement of defence equipment. Over the next 5-10 years, such reforms will equally help Defence PSUs and private industry to step towards achieving a self-sustaining Defence industry in the country.

Going forward, the revenue realization for the company will grow consistently as military programs continue to be critical to national security, especially during the recent rise in geopolitical tensions globally.

Meanwhile, the stock is currently forming a stage-one double-bottom base and is trading near its pivot. The company has a strong fundamental profile: EPS ranks 87 and ROE of 25%. Also, the stock has a good RS Rating of 72 and an A/D Rating of A-, while institutional sponsorship grew 3.6% y/y during the quarter.

Born in March 1993, William Joseph O'Neil was an American businessman, stockbroker and writer. The market mogul died at 90 years of age on May 28, 2023.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.