Stocks to buy: Raja Venkatraman's top picks for 5 January

Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:

DABUR(Cmp ₹522.60)

DABUR: Buy above ₹525, stop ₹507 target ₹580 (Multiday)

• Why it’s recommended: Dabur India Ltd. is a leading Indian multinational FMCG (Fast-Moving Consumer Goods) company, known globally as a major producer of Ayurvedic and natural healthcare products, blending traditional wisdom with modern science for over 138 years. A double bottom formation seen over the last few weeks was seen getting resolved as some strong trended action is emerged on Friday in an upward charge. Strong breakout beyond TS and KS on intraday charts is fueling a new move.
• Key metrics:
  • P/E Ratio : 65.02
  • 52-week high: ₹576.80,
  • Volume: 5.34M
• Technical analysis: Support at ₹500, resistance at ₹650.
• Risk factors: High dependence on the cyclical steel industry and single-product focus, Lock-in Periods and liquidity risk.
• Buy: above ₹525.
• Stop loss: ₹507.
• Target price: ₹580(1 Month)

RRKABEL (Cmp ₹1510.50)

RRKABEL:Buy above ₹1515, stop ₹1470 target ₹1615 (Multiday)

• Why it’s recommended: RR Kabel Ltd (R R Kabel Limited) is a prominent Indian conglomerate in the electrical sector, specializing in the manufacturing and sale of wires, cables, and fast-moving electrical goods (FMEG). As cable stocks are holding firm, we can look at the recent rounding pattern that can extend in the coming days. A strong push by the KS band the strong push at every reaction can be seen here from a positive view for a push to higher levels. Go long now.
• Key metrics:
  • P/E: 42.68,
  • 52-week high: ₹1563.10,
  • Volume: 301.87K.
• Technical analysis: Support at ₹1450, resistance at ₹1650.
• Risk factors: Raw material price volatility, competition and economic downturns.
• Buy: above ₹1515.
• Stop loss: ₹1470.
• Target price: ₹1615(1 Month)

PAYTM(Cmp ₹1340.60)

PAYTM: Buy above ₹1340, stop ₹1315 target ₹1385 (Intraday)

• Why it’s recommended: Paytm (One97 Communications Ltd.) is India's leading fintech company, pioneering digital payments and financial services for consumers and merchants, aiming to digitize India's economy. After some long period of consolidation at the Kumo cloud region a sharp rise seen on Friday highlights more upward possibility. With the intraday charts showing some rise positive DI, we can look at possibility of more upward traction.
• Key metrics:
  • 52-week high: ₹1381.75,
  • Volume: 2.21M.
• Technical analysis: Support at ₹1250, resistance at ₹1450.
• Risk factors: Regulatory compliance, intense market competition, and sustained profitability challenges.
• Buy: above ₹1340.
• Stop loss: ₹1315.
• Target price: ₹1385.

Stock Market Recap

Indian equity markets closed on a strong note on Monday, buoyed by firm global cues and robust buying in banking and metal counters. The Sensex advanced 573.41 points, or 0.67 percent, to settle at 85,762.01 after touching an intraday high of 85,812.27. The Nifty gained 182 points, or 0.7 percent, to close at 26,328.55, briefly hitting a record peak of 26,340.10. Asian markets, including South Korea’s Kospi, Shanghai’s SSE Composite, and Hong Kong’s Hang Seng, traded positively, while U.S. futures indicated a firm Wall Street opening.

Large-cap buying remained evident, with Reliance Industries rising nearly 1 percent for the second straight session. Analysts noted that upbeat auto sales and sectoral updates point to stronger December-quarter earnings. Domestic institutional investors continued steady purchases, cushioning against foreign outflows. Meanwhile, the rupee appreciated by 6 paise to 89.92 against the dollar, with RBI interventions keeping the 90 level intact amid balanced forex flows.

Outlook for trading

Bullish resolve is helping the Nifty sustain the strong upward drive but the trends are beginning to show some tiredness in the recent moves. The sudden intraday collapse is attracting some bearishness.

Currently, overall momentum and sentiment are buoyant, but the unexpected stretch of positive vibes has begun attracting some hesitation. The absence of any news triggers has curtailed the broader indices and has led to some stock-specific action. However, the bullish camp has managed to retain the bullish bias despite the minor hiccups.

As Indices began to range and stock-specific action began to take over, we need the traders and investors to rest their earlier approach and find newer ways to approach the market. Mid and Small Cap action shall continue to be robust, and the strong retail participation is seen across sectors. The trends are very brittle, and hence we need to keep a watch on how the market is going to pan out over the next few days.

The renewed buy that emerged in the last few days is now forcing the weak hands to quickly surrender when any trouble hits and this leads to a large liquidation of the leveraged positions and that ends the reaction because there is hardly any follow thru selling that is emerging. Global markets are also in a recovery mode, and that is supportive of continued mild bullishness locally. No sign of divergences can be spotted on the RSI charts, suggesting that we should continue to look for pullbacks to retain the long bias. The prices are travelling along the support trend line as shown on the Intraday chart, implying continued demand at lower levels.

Looking at the option data, it is clear that the trends are confused and hence the probability of the support level to break is very high. At the moment, the OI data is highlighting that the trends would now shift into a new, wider range to oscillate between 26000 and 26600 for this series.

Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.

Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.