Nuvama Sees Potential Market Recovery in Samvat 2083 with Five Stocks to Watch

The festive spirit can be felt all around. Nuvama’s five-stock list includes Adani Energy Solutions , Coforge , KDDL , Punjab National Bank and Zydus Lifesciences . The brokerage sees potential for a market recovery in Samvat 2083, supported by lower valuations, extreme FII short positioning, and possible domestic and global triggers. Nuvama’s Technical Desk has identified five stocks for investors to watch in Samvat 2083, with Adani Energy Solutions, Coforge, KDDL, Punjab National Bank and Zydus Lifesciences making the list. In its Diwali Picks 2026 report dated November 2, the brokerage presents a constructive outlook for Indian equities. It points to lower valuations and bearish positioning among foreign institutional investors (FIIs) as factors that could create room for a recovery if a favourable trigger emerges. The report’s central market outlook is captured in its section heading, “A year of Revival and Re-rating – Samvat 2083.” The five stock selections are based primarily on technical indicators, including chart breakouts, moving averages, support levels and relative strength. Nuvama also highlights IT, public-sector banks and pharmaceuticals as sectors to watch. Potential market catalysts include an India-US trade agreement, easing geopolitical tensions involving Iran, possible changes to capital gains taxation, rupee stabilisation and a potential global rotation away from expensive AI-linked stocks. Nuvama describes Samvat 2082 as “A Year of Correction, Consolidation & Divergence.” Persistent FII selling, elevated short positions in index futures and uncertainty surrounding global trade and tariffs weighed on Indian equities, while small- and mid-cap stocks underwent a valuation reset. Geopolitical tensions involving Israel, Iran and the US also raised concerns about crude oil prices, inflation and global liquidity, according to the brokerage. However, Nuvama notes that corporate earnings remained relatively resilient even as market valuations corrected towards multi-year lows. It believes this has improved the risk-reward profile for investors entering the new Samvat year. The report outlines five potential catalysts under the heading “Samvat 2083 – Five Potential Catalysts for Market Resurgence.” These include progress on an India-US trade deal, a possible global shift away from expensive AI-linked stocks, a diplomatic resolution involving Iran, domestic policy measures such as capital gains tax relief, and a correction in gold and silver prices that could eventually redirect liquidity towards equities. These are potential triggers rather than confirmed developments. Nuvama’s outlook depends partly on whether one or more of them materialise and improve investor confidence. One of Nuvama’s central arguments is that foreign investor positioning has become sufficiently bearish to leave room for a sharp upward move. The report says FII positions in index futures have reached historically extreme short levels. Nearly one lakh short contracts had already been covered from peak levels, indicating an initial shift in positioning, while a significant short base remained outstanding. A positive domestic or global development could prompt investors to cover additional short positions, creating further buying pressure and accelerating a market recovery. Nuvama’s assessment is explicit: “At such extreme positioning levels, the risk of an upside surprise appears greater than that of further downside.” The brokerage also notes that the Nifty in US-dollar terms is approaching an important technical support zone. This area coincides with the lower boundary of a declining channel and a retest of the index’s 2023 breakout level. The index has shown positive RSI divergence, with the indicator failing to confirm the weakness suggested by fresh price lows. Nuvama interprets this as a potentially constructive technical signal. However, the report describes a market waiting for a trigger, rather than one in which a sustained reversal has already been confirmed. Valuations form another part of Nuvama’s constructive outlook. The brokerage says the Nifty 50’s trailing price-to-earnings ratio was around 19 times as of October 31, 2026, among its lowest readings since 2022. Despite the index remaining significantly above its 2022 levels, its valuation multiple has returned to a similar range. Nuvama attributes this to a combination of earnings growth and valuation compression. The brokerage identifies the 19-20 times P/E range as a zone that has historically attracted buying interest. With earnings remaining supportive, it believes the current setup offers a more favourable risk-reward profile for long-term investors. Lower valuations alone, however, do not guarantee a market recovery. Nuvama’s analysis suggests that a positive catalyst, such as easing geopolitical tensions or a revival in foreign investor confidence, could help translate the improved valuation backdrop into stronger buying interest. Nuvama highlights information technology, public-sector banks and pharmaceuticals as sectors with favourable characteristics entering Samvat 2083. Its reasoning differs across the three groups, ranging from a potential recovery after underperformance to improving fundamentals and continued relative strength. Nuvama sees early signs of recovery in the Nifty IT Index after a prolonged period of underperformance. The brokerage notes that recent quarterly results have generally been encouraging, with several companies delivering earnings in line with or above expectations. Although growth remains moderate, the absence of major disappointments following a sharp valuation correction has improved the sector’s risk-reward profile. Indian IT companies could also benefit if global investors rotate away from richly valued AI-focused stocks towards other markets, Nuvama argues. More reasonable valuations, resilient earnings and improving technical indicators underpin its view that the sector offers a potential contrarian opportunity. Nuvama’s outlook for public-sector banks is supported by healthy credit growth, improving asset quality and resilient profitability. The brokerage points to lower non-performing assets and credit costs as factors that have strengthened bank balance sheets. Recent Q2FY27 results also reflect the sector’s underlying strength, according to the report. Looking ahead, a pickup in corporate borrowing, easing funding costs and a potential recovery in net interest margins could support earnings growth. Nuvama adds that valuations at several PSU banks remain reasonable relative to their improved return-on-equity profiles, leaving room for selective re-rating. Pharmaceutical stocks have shown relative outperformance and recorded fresh highs even as the broader market remained volatile, according to Nuvama. The brokerage cites healthy domestic demand, particularly in chronic therapies, and resilient earnings among leading listed companies as fundamental support for the sector. US generic pricing pressure remains a key risk, making stock selection important. Nevertheless, Nuvama believes improving participation across pharma stocks, diversified growth drivers and relatively visible earnings could help the sector maintain its market leadership. The brokerage’s stock selections reflect its technical approach. The report focuses on price structures, breakout levels, moving averages, Fibonacci retracements and relative performance against relevant indices. Nuvama sees encouraging signs of a potential structural trend reversal in Adani Energy Solutions after the stock broke out of a three-year consolidation phase in April 2026. On the monthly chart, the stock is retracing towards its 50% Fibonacci retracement level, which coincides with the previous breakout zone. The brokerage also highlights a positive crossover involving the 50-week moving average on the weekly chart, which strengthens its technical setup. Nuvama views the ongoing retest as an opportunity with a potentially attractive risk-reward profile. The thesis rests on the stock holding its breakout area and maintaining the broader reversal structure. Coforge is Nuvama’s selection from the IT sector. The brokerage highlights the stock’s strong relative performance, noting that it registered its highest-ever weekly and monthly closes at the time of the report. Coforge has also staged a strong reversal from its 200-week moving average, which Nuvama identifies as an important support zone. The stock’s performance relative to the broader IT index is another factor behind the selection. While the index made fresh lows in July, Coforge held above its previous lows, indicating relative strength. Nuvama believes this resilience could allow Coforge to lead the IT sector if a broader recovery develops. Nuvama identifies KDDL as a stock with a bullish technical setup following a breakout from a 30-month symmetrical triangle consolidation. The breakout was preceded by a strong reversal from the 200-week moving average. After a sharp rally, the stock has been retesting its previous resistance zone, which the brokerage says is now acting as support. This change in polarity is an important part of the technical case: a level that previously capped the stock’s advance is now expected to provide support. On the broader chart, Nuvama sees a structure resembling a bullish pole-and-flag formation. The breakout and subsequent retest suggest the possibility of another upward move, provided the setup remains intact. Punjab National Bank is Nuvama’s banking selection. The brokerage says the stock is approaching a crucial technical breakout, with its monthly chart testing a downward-sloping resistance trendline that has been in place for around 15 years. The broader structure resembles a compressed symmetrical triangle, characterised by progressively lower highs and higher lows. On the weekly chart, Nuvama identifies a symmetrical triangle that has developed since June 2024. The stock has also shown a strong reversal from the 50% Fibonacci retracement, while sustained higher lows point to improving buying interest. A decisive breakout above the long-term resistance could trigger a significant trend reversal, according to the brokerage. The report presents this as a developing setup, not as a breakout that has already been confirmed. Zydus Lifesciences is Nuvama’s pharmaceutical-sector pick. The stock has maintained a series of higher lows over the preceding 15-18 months, according to the report. It broke out of an 18-month price pattern in April 2026 and recorded its highest-ever quarterly close in September. The latest breakout from a five-month consolidation, accompanied by the highest weekly close in two years, suggests the possibility of another upward move. Nuvama also highlights the stock’s relative strength against the Nifty Pharma Index, which was approaching its 2024 highs. The brokerage interprets this as a sign of renewed sector leadership and sustained buying interest. Nuvama’s Diwali report combines a constructive market outlook with five stock-specific technical setups. Its broader argument is that the correction in valuations, the extent of FII short positioning and the potential for favourable global or domestic developments could create conditions for a recovery.