Diwali 2025 Stock Picks: Five Stocks Identified for Up to 40% Returns

As Diwali 2025 nears, the stock market is entering a crucial accumulation phase, offering investors a chance to prepare for the next significant surge. Sumeet Bagadia, Executive Director at Choice Broking, has identified five stocks for Diwali 2025 that could yield up to 40% returns by the next Diwali, ensuring an appealing Samvat 2082.

Nifty is currently in a sideways range after rebounding from its demand zone. This consolidation phase is seen as a healthy pause in the broader uptrend, providing a strategic buying opportunity. The chart structure suggests market stabilization, creating a favourable environment for long-term investors.

"The Cup and Handle formation on the weekly timeframe strengthens the bullish setup," said Sumeet Bagadia. The lower band of this range aligns with the short-term 20-day EMA, offering technical support in the 24,000-23,800 zone. A rebound here could signal a renewed upward move.

Looking ahead, Nifty aims for 26,500 and 28,000 by Diwali 2026. Investors positioning during this consolidation may benefit from a robust market recovery as economic fundamentals support growth. Building a resilient portfolio this Diwali could set the stage for significant long-term wealth creation.

Bank Nifty has recently shown strong recovery and trades at 56,520. It broke out of the 53,500-54,000 resistance zone and retested it as solid support before rebounding. This confirms a successful breakout retest, and surpassing the recent swing high would validate bullish momentum.

Bank Nifty trades above the 20-week, 50-week, and 200-week EMAs, indicating strong bullish undertones. "The Weekly RSI stands at 62.18, suggesting room for consolidation before the next major upward move," noted Sumeet Bagadia. The index forms higher highs and lows on the weekly timeframe.

The index is expected to find strong support between 54,000-53,500, offering a favourable buying opportunity for long-term investors. Any correction toward this zone should be viewed as a healthy pullback to build momentum for the next rally leg.

Diwali Stock Picks for 2025

Sumeet Bagadia has selected five stocks for Diwali 2025: Federal Bank, Cipla, BDL, Ashok Leyland, and SAIL. These stocks are poised for potential gains based on their technical setups and market conditions.

Federal Bank is trading around Rs 213 and shows strong base formation with price action respecting an upward-sloping trendline support. A breakout above Rs 220 could trigger a rally towards Rs 245-255.

Cipla exhibits strength after consolidating within a defined range and forming higher highs and lows from recent support levels. Trading around Rs 1541, it faces resistance near Rs 1580; breaking this could lead to targets of Rs 1770-1850.

Stock Analysis: BDL and Ashok Leyland

BDL maintains a higher high and low formation on the weekly chart. Trading near Rs 1485, it finds support at the 50% Fibonacci retracement level. A breakout above Rs 1560 could signal renewed bullish momentum towards Rs 1700-1785.

Ashok Leyland displays a strong bullish structure with a Rounding Bottom pattern on the weekly chart. Trading around Rs 135 with consistent volume support indicates strong buying interest. A breakout above Rs 140 could open targets of Rs 151-158.

SAIL's Bullish Setup

SAIL forms a classic Cup and Handle pattern on the weekly chart. Trading near Rs 129 with firm volumes reflects growing buying interest. A sustained close above Rs 138 could trigger further upside towards Rs 147-153.

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