Stocks to buy: Raja Venkatraman's top picks for 7 October

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

GRAPHITE(current price ₹567.55)

Buy above ₹570 and on dips to ₹540, stop ₹530, target ₹625-650

• Why it’s recommended:After spending some time in the clouds, the stock is now steadily heading higher. As hesitant upward traction is beginning to give away, the possibility of prices going above the clouds is looking more likely. With a strong momentum buildup in play, more upward traction is possible.
• Key metrics:
  • P/E: 28.27
  • 52-week high: ₹614
  • Volume: 1.04M
• Technical analysis: Support at ₹520, resistance at ₹700
• Risk factors: Volatility in the global steel market, dependence on raw materials, limited product diversification, and operational cost pressure.
• Buy at: above 570 and dips to ₹540
• Target price: ₹625-650 in 1 month
• Stop loss: ₹530

ADANIENSOL (current price ₹927.75)

Buy above ₹930 and on dips to ₹900, stop ₹880, target ₹1,030-1,090

• Why it’s recommended: The charts show that a constant pullback into support zones of the TS & KS Bands is helping the stock stage a strong move to the upside. A long body candle formed on every dip is igniting some bullish enthusiasm. Positive outlook has emerged as the stock is demonstrating a strong upward drive. Can look to go long.
• Key metrics:
  • P/E : 159.59
  • 52-week high: ₹1,090.65
  • Volume: 1.05M
• Technical analysis: Support at ₹855, resistance at ₹1090.
• Risk factors: Economic slowdowns, stagnant demand,corporate governance.
• Buy at: above ₹990 and dips to ₹900.
• Target price: ₹1030-1090 in 1 month.
• Stop loss: ₹880.

UGROCAP (current price: ₹189)

UGROCAP:Buy above ₹190 and on dips to ₹180, stop ₹175, target ₹210-216

• Why it’s recommended: After some profit-booking a long body green candle is seen reviving from the TS & KS zone, indicating a strong push to the upside. With the long body candle being formed and RSI moving above 60 we can look at how this counter shapes up in the next few days. Consider going long.
• Key metrics:
  • P/E: 14.88
  • 52-week high: ₹264.58
  • Volume: 33.46K
• Technical analysis: Support at ₹173, resistance at ₹210
• Risk factors: losing market share, price fluctuations and supply shortages.
• Buy: above ₹190 and on dips to ₹180
• Target price: ₹210-216 in 1 month
• Stop loss: ₹175

How the stock market performed on Monday

The Nifty 50 ended at 25,077.65, up 183.40 points or 0.74%, after touching a high of 25,095.95. The Sensex gained 582.95 points or 0.72% to settle at 81,790.12. Midcaps outperformed with a 0.7% rise, while smallcaps saw marginal losses. Sectoral action was led by IT, which surged 2%, followed by private banks (+1.2%), healthcare (+1%), oil & gas (+0.7%), and PSU banks (+0.4%).

In contrast, metals, media, and FMCG declined between 0.3% and 0.9%. Top gainers on the Nifty included Max Healthcare, Shriram Finance, Apollo Hospitals, TCS, and Tech Mahindra, while Tata Steel, Adani Ports, Power Grid Corp, ITC, and NTPC were among the laggards. Strong institutional buying and global cues supported the upbeat sentiment.

Outlook for trading

Hesitation has been overcome and the strong resolve to move higher has met with good demand. As the trends begin to hold over the last few days the long body candle revival has once again assured investors of steady buying.

Trading has been daunting in the past few sessions the market is now back to last Wednesday's high. The rise on Monday has retraced 61.8% Fibonacci levels of the recent fall. As bullish bias continued to receive some injections, we need to remain calm and hold any potential recovery. As one can see on the daily charts, prices have tread into strong resistance at the current close and will need more tailwinds to fuel further upside.

The rise on Wednesday highlights the strong cloud resistance on rally after a strong decline at the start of the week. The supplies at higher levels will continue to test confidence, but a recovery is emerging swiftly from lower levels, signalling that the highs will continue to attract demand. With strong bullish possibilities emerging, we can now see that the weekly charts are beginning to show some aggressive potential to move higher. As positive cues continue to emerge, one should look at the potential to participate in every dip as the market retains a positive bias.

While trends remained robust, we can observe that the market is attempting to move out of a range and a possible short covering action may emerge today. We can see that Nifty could look at 24800, which has now turned into a supports for a bullish rebound. The road ahead looks promising as 200 points to the upside remains a potential target in the coming week.

After identifying that the options data had reached oversold status, the market responded resolutely. The max pain point has now moved to 25050 and will continue to influence any buy on decline. With the Open Interest data clearly indicating that hurdles have shifted to higher levels at 2500, we can continue to look at a 30-minute range breakout to creat some longs.

Raja Venkatraman is co-founder, NeoTrader.

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