As the festival of lights marks the beginning of a new Samvat year, it also offers an opportunity to look ahead and identify emerging possibilities across the equity markets.

As we step into a new Samvat year, we look forward to identifying opportunities where price behaviour, trend strength and technical confirmation come together to present compelling market setups.

Our Diwali Picks 2026 feature three stocks that are displaying constructive technical structures, supported by significant price breakouts, improving momentum and favourable technical setups. Each selection reflects a distinct chart formation, with the potential for further upside over the coming months.

Hindustan Aeronautics Limited (HAL) appears to be maintaining its positive price structure following a breakout from a prolonged consolidation phase. After recording a high of ₹5,675 in July 2024, the stock witnessed a corrective decline and subsequently entered an extended consolidation phase, forming a well-defined symmetrical triangle. The corrective phase found support near ₹3,046 in March 2025, from where the stock gradually recovered.

After consolidating for more than a year, HAL registered a bullish breakout above the symmetrical triangle resistance near ₹4,590 in July 2026, signalling a potential resumption of its upward trend. The breakout was accompanied by a move above the 50-week and 100-week moving averages, further reinforcing the improving price structure. Following the breakout, the stock advanced towards ₹5,150 in August 2026 before entering a consolidation phase. During this period, the stock successfully retested the earlier breakout zone, while the 50-week and 100-week moving averages provided additional support. The subsequent price action has resulted in a relatively narrow consolidation range, with the stock now approaching its previous swing high.

The momentum setup remains constructive, with the Relative Strength Index (RSI) sustaining above the 60 mark, indicating positive underlying momentum. The stock has also registered a breakout from a smaller consolidation formation, suggesting a potential continuation of the prevailing upward move.

With the broader symmetrical triangle breakout remaining intact and the stock consolidating near its recent highs, HAL presents a favourable opportunity for further upside. The stock can be considered for buying around current levels of ₹5,050, with the potential to move towards ₹5,500. A decline below ₹4,599 would invalidate the bullish view.

IG Petrochemicals Limited (IGPL) appears to be witnessing a significant improvement in its long-term price structure following a prolonged corrective phase. After recording a high of ₹1,018 in October 2021, the stock remained under pressure for several years, forming a sequence of lower tops and lower bottoms while trading below its key long-term moving averages. The corrective phase eventually found support near ₹315 in March 2026, from where the stock staged a meaningful recovery.

The subsequent rebound saw the stock reclaim its key 50-week, 100-week and 200-week moving averages, indicating an improvement in the underlying trend. More importantly, the stock registered a breakout above its long-term downward-sloping trendline near ₹517, signalling a potential reversal in its multi-year corrective structure. Following the breakout, the stock witnessed a sharp upward move towards ₹609 in September 2026 before entering a consolidation phase. The recent corrective decline successfully tested the earlier breakout zone, while the 200-week moving average provided additional support, reinforcing the significance of this support area. The stock has since shown signs of recovery and is currently consolidating below its previous swing high near ₹609.

The momentum setup remains constructive, with the breakout being accompanied by a noticeable improvement in trading volumes, lending credibility to the bullish price structure. The Relative Strength Index (RSI) is also trending higher and is currently hovering near the 63 mark, reflecting sustained positive momentum. A decisive move above the recent swing high could further strengthen the bullish outlook and open up the possibility of a larger upward move.

The stock presents an attractive buying opportunity around ₹532, with the breakout from its multi-year downward-sloping trendline suggesting scope for a sustained upward move towards ₹675. A decline below ₹489 would invalidate the bullish view.

LMW Limited (LMW) appears to be regaining bullish momentum following a successful retest of its falling channel breakout. After recording a high of ₹19,200 in September 2024, the stock entered a corrective phase, forming a series of lower highs and lower lows within a well-defined falling channel. The decline eventually found support near ₹11,920 in March 2026, triggering a strong recovery.

The subsequent rebound saw the stock reclaim its key 50-week, 100-week, and 200-week moving averages, signalling a shift in the underlying trend. In August 2026, LMW registered a breakout above the falling channel resistance near ₹16,180, extending its rally towards ₹20,150 before witnessing a corrective pullback. Interestingly, the recent decline has brought prices back towards the earlier breakout zone, which coincides with the 50-week and 100-week moving averages, reinforcing the significance of this support area.

The momentum setup remains constructive, with the Relative Strength Index (RSI) having broken above its downward-sloping trendline earlier this year. The recent retest of this breakout level on the RSI, coupled with supportive volume activity, further strengthens the bullish outlook.

The stock presents a potential buying opportunity around ₹16,815, with the successful retest of the falling channel breakout suggesting scope for a renewed upward move towards ₹18,500. A decline below ₹15,649 would invalidate the bullish view.

-Foram Chheda, CMT
Technical Research Analyst