This Diwali be bullish but selectively: 7 largecap stocks with right mix of RoE & RoCE

While the under current of the market is still bullish but as corrections and consolidation are part of every bull market, nifty is moving in and out green, there are clear signs of profit booking taking place in the broader market with market breadth not being as positive as it used to be. While the initial part of any volatility is led by large caps, there is a higher probability that the large caps are able to stabilize much before any part of the market. So, if one is thinking of fresh exposure to the market it would be better to stick with large caps. ET screener powered by Refinitiv’s Stock Report Plus lists down quality stocks with high upside potential over the next 12 months, having an average recommendation rating of “buy” or strong buy . The screener applies different algorithms for all BSE and NSE stocks.

After two weeks of straight up move, bulls are taking rest, nifty witnessed a small phase of volatility but the bias of that volatility was still bullish, clearly indicating that the equation is still in favor of bulls. These stocks have seen their score improvement and have moved out of negative territory over the last one month. Besides others, there is an Adani group stock which moved out of the negative score zone. ET screener powered by Refinitiv’s Stock Report Plus applies different algorithms & filters to all BSE and NSE stocks, and lists stocks which fulfill the various criteria as specified into the algorithms & filters to find those which might help navigate the stock market.

After the last few weeks of correction, while the broader market indices like nifty and sensex are inching upward once again, given the fact that some of the headwinds are still present, it would be still be better to ensure that caution is the word which stay in one's mind while looking at stocks. Caution in terms of the socks where analysts are bullish because of one or the other reason even when markets have been volatile. In the last quarter of the current financial year, it is time to take a step back, think and then make a decision both when buying and selling any stock as global flows have high probability of changing directions. These selected stocks depict a strong upward trajectory in their overall average score. This implies that there has been a significant improvement in their market outlook in the given time frame.

With the US Fed stance being clearly dovish and US bond yields coming down sharply, The “risk on trade” got another boost and that is clearly reflected in the overall markets breadth which is extremely positive. Just keep an eye on liquidity as reflected by FII numbers and the market breadth in the next few sessions as that will determine what happens to mid-cap stocks in the medium term. ET screener powered by Refinitiv’s Stock Report Plus lists down quality stocks with high upside potential over the next 12 months, having an average recommendation rating of “buy” or strong buy . This predefined screener is only available to ET Prime users.

As broader market indices, sensex and nifty continue to form new highs some minor consolidation is happening in markets. During this period, some stocks have witnessed consistent improvement in their scores. The selected stocks depict a strong upward trajectory in their overall average score which is based on five key pillars i.e. earnings, fundamentals, relative valuation, risk and price momentum. This implies that there has been a significant improvement in their market outlook in the given time frame.