Indian stock markets witnessed a third straight day of declines on Wednesday, 7 January, setting a cautious tone for Thursday's trading session. Amid this volatility, market expert Raja Venkatraman, co-founder of NeoTrader, has identified three specific stocks for investors to consider on 8 January.
Market Recap: Indices Extend Losses Amid Global Uncertainty
The benchmark indices continued their downward trend on 7 January. The Sensex fell by 102 points, or 0.12%, to close at 84,961.14. Similarly, the Nifty 50 dropped 37.95 points, or 0.14%, settling at 26,140.75. The sell-off was attributed to a combination of persistent foreign institutional investor (FII) outflows, geopolitical tensions, and weakness in other Asian markets.
However, broader markets displayed resilience. The BSE Midcap index gained 0.5%, and the BSE Smallcap index rose 0.12%. Sectoral performance was mixed. Titan Company surged 4% to a new 52-week high following strong quarterly results, providing some support to the indices. On the losing side, stocks like Cipla, Maruti Suzuki, and Tata Motors Passenger Vehicles exerted downward pressure.
Raja Venkatraman's Exclusive Stock Picks for 8 January
Despite the cautious market sentiment, Venkatraman sees specific opportunities. He recommends three stocks with defined entry points, stop-loss levels, and targets.
1. ABB India Ltd (CMP: ₹5299)
Recommendation: Buy above ₹5310 for a multiday holding period.
Stop Loss: ₹5160
Target Price: ₹5700
ABB India, a leader in electrification and automation, is showing promising technical signs. According to Venkatraman's analysis, the stock has witnessed a strong surge after spending months below a key technical indicator (the cloud). A robust move beyond other technical levels on the daily charts is fueling a new bullish possibility. Key support is seen at ₹5000, while resistance is at ₹7500. Investors should note the stock's high P/E ratio of 63.46 and risks from macroeconomic uncertainty and intense competition.
2. Alkem Laboratories Ltd (CMP: ₹5806.50)
Recommendation: Buy above ₹5815 for a multiday holding period.
Stop Loss: ₹5575
Target Price: ₹6250
This major pharmaceutical company, specializing in generic and specialty medicines, displayed a strong breakout pattern on Tuesday. Venkatraman points to a sharp rise in the Average Directional Index (ADX) and Directional Indicator (DI) as signals to initiate a long position for a push to higher levels. The stock has support near ₹5400 and faces resistance around ₹6300. Key risks include the company's high dependence on the acute therapeutic segment and potential international regulatory scrutiny.
3. Birlasoft Ltd (CMP: ₹443.40)
Recommendation: Buy above ₹444 for an intraday trade.
Stop Loss: ₹434
Target Price: ₹460
The IT services provider is seen taking a breather after a strong upward move. Venkatraman's analysis suggests that with momentum holding steady in recent sessions and the ADX indicator charging higher, there is a possibility for more upward traction in the near term. The stock has support at ₹415 and resistance at ₹485. Potential risks for Birlasoft include stagnation in revenue growth and high talent attrition costs.
Market Outlook and Trading Strategy
The Nifty's struggle to hold the 26,000-26,100 zone remains a focal point. Venkatraman notes that while selling pressure has been persistent, there is also consistent buying interest at lower levels. The market lacks clear directional conviction, suggesting a neutral trading bias for now.
From a technical perspective, the 26,080 level is crucial as it represents a 61.8% Fibonacci retracement of the rally seen since 30 October. The Max Pain point for options data has shifted to 26,150, which will be a key level to watch for deciding the market's next move. For any short positions to be considered, Venkatraman states that Nifty would need to move above 25,900, which is the immediate support level indicated by Open Interest data.
Disclaimer: Investments in securities markets are subject to market risks. Raja Venkatraman is a SEBI-registered research analyst (Registration No. INH000016223). The views and recommendations are his own and do not represent the views of Mint. Readers are advised to consult certified experts before making any investment decisions.
