Indian equity benchmarks closed in the red on Tuesday, setting a cautious tone for the trading session on 7 January. Amid this backdrop, market expert Raja Venkatraman, co-founder of NeoTrader, has identified three stocks that present potential buying opportunities for traders and investors.
Market Recap: A Weak Closing
The trading session on Tuesday, 6 January, ended with losses. The Sensex dropped 376 points to close at 85,063, while the Nifty fell 72 points to settle at 26,179. Market sentiment was negative, reflected in an advance-decline ratio of 2:3, indicating broad-based selling pressure. While the midcap index also declined, the Nifty Bank managed to eke out a gain of 74 points.
Raja Venkatraman's Top Stock Picks for 7 January
Based on technical analysis and emerging chart patterns, Venkatraman suggests considering these three scrips for trading on Wednesday.
1. MARICO (CMP: ₹779.05)
The Mumbai-based FMCG major, specializing in beauty and wellness, is showing signs of a bullish breakout after consolidating for nearly six months. A robust move beyond key technical levels on daily charts is fueling a new upward possibility. The trends observed at the start of the week highlight strong bullish potential.
Key Details:
- P/E Ratio: 53.94
- 52-Week High: ₹775.55
- Action: Buy above ₹780
- Stop Loss: ₹755
- Target: ₹825 (1 Month)
- Technical Levels: Support at ₹720, Resistance at ₹865
Investors should note risks like changing consumer preferences, commodity price volatility, and intense competition.
2. DIVISLAB (CMP: ₹6,642.50)
This pharmaceutical giant, a leading global manufacturer of APIs, witnessed a strong long-body candle breakout on Tuesday. A sharp rise in the Average Directional Index (ADX) and Directional Indicator (DI) signals a potential long opportunity for a push to higher levels.
Key Details:
- P/E Ratio: 70.14
- 52-Week High: ₹7,071.50
- Action: Buy above ₹6,650
- Stop Loss: ₹6,550
- Target: ₹6,950 (1 Month)
- Technical Levels: Support at ₹6250, Resistance at ₹6900
Key risks include climatic volatility affecting operations, project execution challenges, and margin pressures.
3. PNB HOUSING FINANCE (CMP: ₹1,007.85)
After a strong upward move, the stock of this prominent housing finance company is taking a breather. The momentum has held steady in recent sessions, and a rising ADX suggests the possibility of more upward traction in the coming days.
Key Details:
- P/E Ratio: 11.95
- 52-Week High: ₹1,141.90
- Action: Buy above ₹1,010
- Stop Loss: ₹995
- Target: ₹1,040
- Technical Levels: Support at ₹947, Resistance at ₹1050
Risks involve sector-specific challenges, broader economic and market risks, and regulatory changes.
Market Outlook and Trading Strategy
Venkatraman notes that the market, muted by geopolitical tensions, tested investor patience on Tuesday but held key lower levels. The Nifty has been in a 1,000-point range over the last month, which may limit expectations for the January series. Current charts indicate some profit-booking is underway.
The trend emerging suggests that last week's dips held a crucial support zone. For a renewal of bullish bias, the Nifty needs to sustain above 26,200. The Put-Call Ratio (PCR) nearing 0.91 hints at a potential trended move. As per Open Interest data, 26,000 is a critical support level for the Nifty; a sustained break below could signal waning bullish conviction. Traders are advised to stay alert for a 30-minute range breakout on Wednesday to gauge the next directional move.
Disclaimer: Investments in securities are subject to market risks. The views are those of the individual analyst. Investors are advised to consult certified experts before making any investment decisions. Raja Venkatraman's SEBI Research Analyst registration number is INH000016223.
