As Indian equity markets kick off the new year by scaling fresh peaks, research and advisory platform MarketSmith India has identified two stocks for investors to consider on Monday, 5 January. The recommendations come on the back of a powerful rally on Friday, 2 January, which saw benchmark indices close at all-time highs.
Market Recap: A Record-Breaking Start to 2026
The first trading session of 2026 witnessed robust buying across the board, fueled by optimism ahead of the third-quarter earnings season. The Nifty 50 surged 182 points, or 0.70%, to settle at a record closing high of 26,328.55. During the day, it even touched a new intraday peak of 26,340. The Sensex mirrored this strength, climbing 573 points (0.67%) to end at 85,762.01.
Broader markets displayed even more vigour. The BSE Midcap index gained 0.97%, and the Smallcap index advanced 0.79%. This broad-based rally translated into a massive wealth creation of over ₹4 trillion in a single session, pushing the total market capitalisation of BSE-listed firms above ₹481 trillion.
MarketSmith India's Top Stock Picks for 5 January
Against this bullish backdrop, MarketSmith India, which employs the CAN SLIM methodology pioneered by William J. O'Neil, has released its actionable ideas for the trading day.
1. UNO Minda Ltd: Betting on Auto Ancillary & Electrification
Current Price: ₹1,320
Action: Buy
Buy Range: ₹1,280–1,300
Target Price: ₹1,470 (in 2-3 months)
Stop Loss: ₹1,250
The advisory recommends a buy on UNO Minda, a leading player in the auto components space. The rationale is based on the company's strong positioning to benefit from key automotive trends like vehicle electrification and premiumisation. It boasts a diversified product portfolio, consistent revenue growth, and improving margins. Its strong relationships with original equipment manufacturers (OEMs) and a growing export footprint add to the appeal.
From a technical standpoint, the stock has witnessed a trendline breakout. Key metrics include a P/E of 80.55 and a 52-week high of ₹1,382.
However, investors should note the associated risks. The company's fortunes are tied to the cyclical demand of the automobile industry. It faces potential margin pressure from volatile raw material prices, intense competition, and execution risks in new product launches. The pace of the regulatory-driven shift to electric vehicles is another factor to watch.
2. Indian Bank: A Play on Improving Fundamentals
Current Price: ₹860
Action: Buy
Buy Range: ₹855–866
Target Price: ₹970 (in 2-3 months)
Stop Loss: ₹820
The second pick is public sector lender Indian Bank. The recommendation hinges on its steadily improving asset quality, with both gross and net non-performing assets (GNPA & NNPA) showing a declining trend. The bank is experiencing healthy credit growth, supported by a strong low-cost CASA (Current Account Savings Account) base and improving profitability metrics. Its expanding retail and MSME loan book and government backing as a PSU bank are seen as positives.
Technically, the stock has reclaimed its 50-day moving average (50-DMA) on above-average volume. It trades at a P/E of 9.92 and its 52-week high stands at ₹894.85.
The risks for Indian Bank include its exposure to stressed corporate loans, sensitivity to an economic slowdown, and margin pressure from rising competition. The typical governance constraints of PSUs, interest rate volatility, and a higher cost structure due to its extensive branch network are other challenges.
Technical Outlook: Market in a "Confirmed Uptrend"
MarketSmith India's analysis confirms a structurally positive setup for the market. Following the decisive breakout to new highs, the market status is classified as a "Confirmed Uptrend" as per O'Neil's methodology. The Nifty 50 remains within a rising channel, supported by its key moving averages.
Momentum indicators like the RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) are also signalling strength. The immediate upside target for the Nifty is seen in the 26,500–26,700 zone, with support placed at 25,900 and a critical demand zone at 25,500.
The banking sector index, Nifty Bank, mirrored the bullish sentiment, closing near its lifetime high at 60,150.95, up 0.70%. It has charted four consecutive bullish candles, with the RSI around 68 and a positive MACD crossover. The index faces immediate resistance near 60,300-61,000, with strong support in the 58,500-58,000 range.
Disclaimer: The views and recommendations are those of MarketSmith India. Investors are advised to consult certified experts before making any investment decisions.
