Diwali Watchlist: As Diwali lights begin to sparkle across India, the stock market too seems to be regaining its glow. After a stretch of seven straight days of decline, Indian equities have bounced back with renewed energy a reflection of rising optimism ahead of the festive season. For investors and traders, this is not just a season of celebration but also of opportunity. Retail-focused stocks like Aditya Birla Fashion & Retail and FSN E-Commerce Ventures (Nykaa) are showing strong bullish signals, indicating that brighter days may lie ahead for both the market and investors’ portfolios.
The Market’s Festive Comeback
In the past eight sessions, the Nifty 500 index saw a decline of more than 3.6%, largely due to global uncertainties surrounding U.S. trade tariffs and profit booking in sectors like auto and banking. However, the Indian market has demonstrated remarkable resilience. The approach of Diwali has reignited investor confidence, especially in sectors directly tied to consumer spending retail, fashion, and e-commerce.
As families gear up for shopping sprees and brands roll out festive offers, retail stocks are once again in the spotlight. This surge in consumer demand during the festival period often drives short-term momentum in related stocks, and technical indicators now suggest that these two retail giants Aditya Birla Fashion and Nykaa could be among the top gainers this season.
Aditya Birla Fashion Signs of a Strong Reversal
Aditya Birla Fashion & Retail has been a household name in India’s apparel segment, owning well-known brands and enjoying a solid market presence. However, like many others, the stock faced a long correction since its September 2024 high of ₹130, losing almost 47% of its value over nine months.
But every dip tells a story of recovery, and this one seems to be writing its own comeback chapter. Starting June 2025, the stock began stabilizing with support from a rising trendline, and by September, it broke out of a rounding bottom pattern a strong technical signal of reversal.
Currently, the stock is trading above its 100-day moving average, which is widely seen as the start of a fresh uptrend. Technical charts also reveal a higher top and higher bottom pattern, another positive indicator. The Relative Strength Index (RSI), a key momentum gauge, has entered bullish territory, signaling growing buying interest.
In simple terms, these indicators show that Aditya Birla Fashion may have completed its correction phase and could now be gearing up for a sustained upward journey. If the current momentum continues, it might well become one of the festive season’s brightest performers on the retail front.
FSN E-Commerce Ventures (Nykaa) Riding the Festive Wave
Nykaa the e-commerce beauty and fashion giant has also caught traders’ attention with its strong comeback. After declining from ₹230 to ₹155 between August 2024 and March 2025, the stock rebounded sharply. From August to September 2025, it soared from ₹155 to ₹240 an impressive 61% rise in just two months.
This bullish move is supported by strong volume action and momentum indicators that reflect renewed investor confidence. The company’s fundamentals remain strong, backed by growing festive season demand and a loyal consumer base that turns to Nykaa for everything from beauty essentials to lifestyle products.
Technically, Nykaa’s price action shows a continued breakout pattern, suggesting that its rally is not a temporary spike but part of a larger bullish phase. As the holiday season brings in higher sales and better quarterly numbers, the stock could continue its upward trajectory.
Why Retail and E-Commerce Are Shining This Diwali
The Indian retail story during the festive season has always been one of resilience and growth. Rising disposable incomes, expanding urban markets, and the emotional connect consumers have with festive shopping all combine to create a strong demand wave.
This year, the return of consumer confidence, coupled with positive market sentiment, gives retail-focused companies a major edge. The upcoming Diwali could thus mark the start of a new bullish chapter for select retail stocks, particularly those backed by strong brands, solid fundamentals, and encouraging technical indicators.
The Technical Story in Simple Words
For new investors wondering what “bullish breakout” really means it’s when a stock that has been declining or consolidating starts moving sharply upward, often backed by higher trading volume. It signals a potential trend reversal, suggesting that the worst may be over and a new rally could be starting.
Both Aditya Birla Fashion and Nykaa are currently showing these signals trading above key moving averages, breaking out of downward patterns, and attracting higher investor interest. In technical terms, these are green flags that indicate a stock’s potential to rise further.
The festival of Diwali has always been associated with light, hope, and new beginnings and this year, that spirit seems to have spread to the Indian stock market. With retail and e-commerce stocks showing strong bullish setups, traders and investors may find plenty of opportunities to celebrate both emotionally and financially.
Disclaimer: This article is for informational and educational purposes only. It does not constitute financial advice or a recommendation to buy or sell any securities. Always consult a certified financial advisor before making investment decisions. Market investments are subject to risks, and past performance does not guarantee future returns.
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