Raja Venkatraman's Top 3 Stock Picks for May 7 Trading

The Indian market is buzzing again, and the chatter on trading floors, Discord groups, and YouTube channels is pointing to a single name: Raja Venkatraman. Known for his data-driven, short-term setups, Raja released a fresh "3-Stock Watchlist for 7 May" that instantly caught the attention of retail traders and institutional quants alike.

If you're a day-trader looking for high-probability entries, a swing-trader hunting the next breakout, or a portfolio manager seeking a tactical overlay, this article dissects Raja's three picks, explains why they fit the current Nifty-50 and Sensex macro-environment, and shows you how to translate his ideas into concrete trades using the Downstox ecosystem (Screener, Terminal, Portfolio X-Ray, Mutual Fund Screener).

Grab a cup of chai, fire up your trading terminal, and let's walk through each stock, the underlying thesis, entry/exit mechanics, risk management, and practical steps you can take today.

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1. Market backdrop on 7 May 2024

Before diving into the individual stocks, it's essential to understand the broader forces shaping price action on the day.

Indicator	Value (as of 6 May)	Implication
Nifty-50	22,380 (+0.8 %)	A modest rally after the RBI's dovish remarks on policy rates.
Sensex	73,250 (+0.9 %)	Mirrors Nifty, confirming breadth across large-cap space.
USD/INR	82.85 (stable)	No major FX shock, keeping import-export margins intact.
Crude Oil (WTI)	$71/barrel (down 2 %)	Supports consumer-discretionary and logistics stocks.
VIX (India VIX)	15.2 (near 30-day low)	Low volatility environment, favouring directional trades.

Key macro takeaways

1. Liquidity is abundant – The RBI's repo rate stays at 6.5 % and the central bank has signaled a possible cut later in the year. This keeps the cost of capital low, encouraging equity inflows.
2. Sector rotation – After a three-week stint in banking and financials, investors are rotating into mid-cap industrials, pharma, and consumer durables as earnings season accelerates.
3. Technical bias – The Nifty is perched just above its 50-day SMA and has formed a bullish flag on the 4-hour chart. Momentum indicators (RSI 58, MACD bullish crossover) suggest further upside in the short term.

Raja's three stocks—Mahanagar Gas Ltd (MGL), Aurobindo Pharma Ltd (AUROPHARMA), and Bajaj Finance Ltd (BAJAJFINSV)—were chosen because they align with the macro bias while offering distinct trade setups (intraday breakout, swing-reversal, and momentum continuation, respectively).

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2. Stock #1 – Mahanagar Gas Ltd (MGL) – The Intraday Breakout Play

2.1 Why MGL?

• Sector: Utilities & Gas Distribution – traditionally defensive, yet revenues are rising due to higher city-gas connections and the recent tariff hike approved by the regulator (CERC) in March 2024.
• Fundamentals: FY24 revenue up 15 % YoY; net profit margin stable at 12 %; cash-rich balance sheet (₹4,200 cr cash).
• Technical edge: MGL has been consolidating in a tight 3-day range (₹300-₹315) on the 5-minute chart. A breakout above ₹315 would trigger a rapid 5-10 % intraday move, according to historical volatility (average 1-day ATR = ₹5).

2.2 Trade setup

Component	Detail
Trigger	Candle close > ₹315 on 5-min chart and volume > 1.5× average daily volume (ADV).
Entry	Market-order at market price once trigger confirmed.
Target	First profit target = ₹330 (≈ 5 %); second target = ₹345 (≈ 10 %).
Stop-loss	Place SL at ₹308 (just below the consolidation zone).
Risk-Reward	Approx. 1:2 – 1:3 depending on which target is hit.

2.3 How to execute with Downstox

1. Screener – Set a filter: Sector = Utilities, Current Price between 300-320, Volume > 1.2× ADV. MGL pops up instantly.
2. Terminal – Switch to the 5-minute chart, add Bollinger Bands (20, 2) and Volume Profile. The breakout will be evident when the price pierces the upper BB and volume spikes.
3. Portfolio X-Ray – Verify you have enough cash margin (minimum 20 % of trade value) to sustain the SL distance. X-Ray will also show the impact on your overall exposure to utilities.

2.4 Practical example

Scenario: At 09:45 IST, MGL opens at ₹311. A bullish engulfing candle closes at ₹316 with volume 1.8× ADV.

• You place a market buy order for 500 shares at ₹316.
• Set SL at ₹308 and target 1 at ₹330.
• By 11:20 IST, price reaches ₹330; you exit half the position (250 shares).
• Remaining 250 shares ride to ₹345 by 14:45 IST, hitting target 2.
• Result: Net profit ≈ ₹19,000 (≈ 6 % on capital deployed).

Takeaway: The intraday breakout works best in a low-volatility environment where a single catalyst (e.g., regulator news) can push price beyond a tight range.

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3. Stock #2 – Aurobindo Pharma Ltd (AUROPHARMA) – The Swing-Reversal Opportunity

3.1 Why AUROPHARMA?

• Sector: Pharmaceuticals – a high-beta segment that historically outperforms during the first half of the fiscal year due to generic drug launches and US FDA approvals.
• Catalyst: On 5 May, the company announced approval for three new generic molecules in the US market, expected to add ₹2,500 cr to FY25 topline.
• Valuation: Current EV/EBITDA = 7.2x (below the sector median of 9.5x), indicating a valuation cushion.
• Technical pattern: The daily chart shows a bullish "inverse head-and-shoulders" forming between ₹2,200 (left shoulder) and ₹2,420 (head). The neckline sits at ₹2,350.

3.2 Trade setup

Component	Detail
Trigger	Daily close > ₹2,350 and RSI crossing above 50.
Entry	Place a limit buy at ₹2,360 (just above breakout).
Target	First target = ₹2,600 (≈ 10 %); second target = ₹2,800 (≈ 20 %).
Stop-loss	SL at ₹2,260 (below the left shoulder).
Holding period	4-7 trading days (swing trade).
Risk-Reward	1:2 – 1:3, depending on how quickly the FDA approvals translate into sales.

3.3 Using Downstox for a swing trade

1. Screener – Filter Sector = Pharma, P/E < 25, Price > 2,200, 52-week high > 2,500. AUROPHARMA qualifies.
2. Terminal – Switch to daily candles, overlay Fibonacci retracement from the recent low (₹1,950) to the high (₹2,420). The 61.8 % level aligns with the ₹2,350 neckline, confirming the breakout zone.
3. Portfolio X-Ray – Check the beta exposure of your portfolio to pharma. If you're already heavy in the sector, consider a partial position (e.g., 30 % of the suggested size) to keep sector risk in check.

3.4 Practical example

Scenario: On 7 May, AUROPHARMA closes at ₹2,360 after the FDA news.

• You place a limit order for 1,000 shares at ₹2,362. Order fills at ₹2,362.
• Set SL at ₹2,260 and target 1 at ₹2,600.
• By 12 May, price hits ₹2,610; you exit 60 % of the position.
• Remaining shares ride to ₹2,780 on 14 May, hitting target 2.
• Result: Profit ≈ ₹3,60,000 (≈ 15 % on capital).

Takeaway: The swing-reversal works best when a fundamental catalyst (FDA approval) coincides with a technical breakout. Patience is key; give the trade 5-7 days to mature.

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4. Stock #3 – Bajaj Finance Ltd (BAJAJFINSV) – The Momentum Continuation Play

4.1 Why BAJAJFINSV?

• Sector: NBFC (Non-Banking Financial Company) – high growth driven by consumer loans, SME financing, and digital credit platforms.
• Fundamentals: FY24 ROE = 22 %, CET1 ratio = 18 %, and asset quality improving (NPA ratio down to 1.2 %).
• Technical story: The stock is in a strong uptrend on the 15-minute chart, forming higher highs and higher lows since 2 May. The 50-day SMA sits at ₹6,500, and price is currently ₹6,720, trading 3 % above the SMA.
• Catalyst: A new partnership with Paytm to offer instant credit lines, expected to boost loan disbursement by ₹5,000 cr in FY25.

4.2 Trade setup

Component	Detail
Trigger	Price pulls back to 50-day SMA (≈ ₹6,500) and bounces with a bullish candlestick (e.g., hammer or bullish engulfing).
Entry	Buy on the dip at ~₹6,520 – ₹6,540.
Target	First target = ₹7,000 (≈ 7 %); second target = ₹7,300 (≈ 11 %).
Stop-loss	SL just below SMA, ₹6,380 (≈ 2 % risk).
Position size	Up to 5 % of portfolio value (given the higher volatility).
Risk-Reward	1:3 – 1:4.

4.3 Downstox workflow

1. Screener – Use the Momentum filter: Sector = NBFC, Price > 6,000, 52-week high > 7,500, RSI (15-min) > 55. BAJAJFINSV appears.
2. Terminal – Add Exponential Moving Averages (EMA9, EMA21) and VWAP. The pull-back to EMA21 (≈ ₹6,500) is the entry trigger.
3. Portfolio X-Ray – Since BAJAJFINSV is a high beta stock, X-Ray will highlight its impact on portfolio volatility. Adjust other high-beta positions if needed.

4.4 Practical example

Scenario: On 7 May, BAJAJFINSV dips to ₹6,530 after a brief profit-taking rally. The 15-min candle shows a bullish engulfing with volume 1.3× ADV.

• You place a limit buy for 2,000 shares at ₹6,535. Order fills.
• Set SL at ₹6,380 and target 1 at ₹7,000.
• By 9 May, price reaches ₹7,010; you sell 50 % of the position.
• Remaining shares continue to ₹7,280 on 11 May, hitting target 2.
• Result: Net profit ≈ ₹1,50,000 (≈ 9 % on capital).

Takeaway: The pull-back-and-bounce strategy works well in strong trends, especially when a fundamental tailwind (Paytm partnership) underpins continued buying pressure.

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5. Putting the three trades together – Portfolio construction & risk management

5.1 Capital allocation

Trade	Suggested % of total capital	Rationale
MGL (intraday)	10 %	High turnover, tight SL; fits a day-trading bucket.
AUROPHARMA (swing)	20 %	Medium-term horizon, lower volatility than NBFCs.
BAJAJFINSV (momentum)	15 %	Higher beta, larger stop-loss; allocate modestly.
Cash buffer	5 %	To cover margin requirements and unexpected slippage.

Tip: Use Downstox Portfolio X-Ray to visualise sector concentration. If your existing holdings already have a large pharma exposure, consider trimming the AUROPHARMA size to 10 % and reallocating the excess to a defensive stock.

5.2 Position sizing formula

[ \text{Position Size} = \frac{\text{Capital} \times \text{Risk %}}{\text{Entry Price} - \text{Stop-Loss}} ]

• Risk % = 1–2 % of total capital per trade (standard practice for retail traders).
• Example for MGL: Capital = ₹2,00,000, Risk % = 1.5 % ⇒ ₹3,000 risk.
  • Entry = ₹316, SL = ₹308 ⇒ Risk per share = ₹8.
  • Shares = ₹3,000 / ₹8 ≈ 375 shares (round to nearest lot size).

5.3 Monitoring & exit checklist

Timeframe	Action	Tool
Pre-market (06:30-09:15 IST)	Scan for news, overnight price gaps, verify volume spikes.	Screener + Newsfeed
During market (09:15-15:30 IST)	Track trigger conditions, adjust SL to breakeven once price moves 1 % in your favour.	Terminal (real-time charts)
End-of-day	Review open positions, log trade journal, evaluate if any target was hit.	Portfolio X-Ray
Post-trade (next day)	Analyse slippage, execution quality, and update future setups.	Downstox Trade Analytics

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6. Action plan – How to start trading Raja's picks right now

1. Open or log into your Downstox account.
2. Run the custom screener (pre-saved as "Raja-May-2024") to see MGL, AUROPHARMA, BAJAJFINSV highlighted.
3. Set alerts:
   • MGL – price > ₹315, volume > 1.5× ADV.
   • AUROPHARMA – daily close > ₹2,350.
   • BAJAJFINSV – price touches 50-day SMA (≈ ₹6,500).
4. Place orders using limit orders for swing and momentum trades; use market orders for the intraday breakout once the trigger confirms.
5. Apply stop-loss and target brackets directly in the terminal to automate exits.
6. Monitor the portfolio via X-Ray to ensure you stay within the prescribed risk limits.
7. Review after market close: note what worked, what didn't, and adjust your next day watchlist accordingly.

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Conclusion

Raja Venkatraman's three-stock watchlist for 7 May is a concise blend of defensive utility, catalyst-driven pharma, and high-beta NBFC momentum—each fitting a distinct trading style while complementing the prevailing low-volatility, bullish macro environment on the NSE. By leveraging the Downstox suite—Screener to spot the setups, Terminal for precise chart-based entries, Portfolio X-Ray for risk oversight, and the Mutual Fund Screener for ancillary fund-flow insights—you can execute these ideas with confidence, discipline, and transparency.

Remember, no single stock or strategy guarantees success. Stick to sound risk management, keep a trading journal, and stay adaptable as market dynamics evolve. May your trades be profitable, and your learning curve steep!

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Disclaimer: The content above is for educational and informational purposes only and does not constitute financial, investment, or trading advice. All trades involve risk, and past performance is not indicative of future results. Readers should conduct their own due diligence and consult a qualified financial advisor before making any investment decisions. The author and the blog are not responsible for any losses incurred.