- Benchmark indices posted a modest 0.3% gain, but breadth turned negative, hinting at underlying weakness.
- Eight high‑conviction stocks broke key chart patterns with strong volume, offering clear entry points.
- Power, pharma, mining, defense, energy, index, infrastructure and banking sectors each show distinct technical narratives.
- Historical budget‑season rallies suggest a potential upside, yet a premature chase could turn into a trap.
- Clear stop‑loss levels and realistic targets give a risk‑managed framework for each trade.
You missed the fine print on yesterday’s rally, and that could cost you.
Why NTPC's Breakout May Ignite Power Sector Upside
NTPC has been coiling inside a long‑term wedge since April 2025. The recent breakout above the rectangular range, backed by robust positive volume, lifted the price above all major EMAs (20, 50, 100, 200). The Relative Strength Index (RSI) holding the 50‑level on daily and weekly charts signals that bullish momentum remains intact. For power‑generation investors, NTPC’s move mirrors a sector‑wide shift as the government signals higher capital spending on renewables in the upcoming budget. Peers such as Tata Power and Adani Green are also perched above key EMAs, suggesting a coordinated rally. Historically, a wedge breakout in the power space precedes a 12‑month upward drift of 10‑15%.
Why IPCA Laboratories' Dragonfly Doji Signals a Mid‑Cap Surge
IPCA Laboratories escaped a tight triangular consolidation (Jan 2‑9) with a 13.6% jump while the broader market slipped 2.5%. The dragonfly doji on Jan 21 acted as a “throw‑back exhaustion” candle, confirming that sellers lost steam. The stock now sits above short‑, medium‑ and long‑term EMAs, and each EMA is sloping upward, reinforcing a bullish bias. In the pharma segment, companies like Sun Pharma and Dr. Reddy’s have been trading flat, making IPCA a standout relative‑strength performer. A similar doji‑driven breakout in 2022 led to a 22% rally over the next quarter.
How NMDC's Inverse Head‑and‑Shoulders Mirrors Commodity Cycle
NMDC’s chart formed an inverse head‑and‑shoulders in late December, a pattern that historically precedes 8‑12‑month uptrends for mining stocks. After breaking above Rs 78.6, the price rallied to Rs 86.72 before retesting the 100‑day EMA. A three‑white‑soldiers candle confirmed accumulation, and volume surged with each upward bar. The broader iron‑ore market is currently pricing in higher export duties, but the upcoming budget may introduce a mineral‑tax rebate, echoing the 2021 scenario when NMDC surged 18% post‑budget.
What Mishra Dhatu Nigam's Trendline Breakout Means for Defense Stocks
Mishra Dhatu Nigam (MDN) finally breached a long‑standing downtrend line, pushing above its short‑term moving average. The daily RSI near 66 and a DMI where +DI exceeds –DI with ADX above 25 confirm strengthening trend momentum. Defense peers such as Bharat Dynamics and Hindustan Aeronautics are still in consolidation, making MDN a rare early‑stage bullish play. Historically, a trendline breakout in the defense sector has preceded a 15‑20% rally driven by increased government procurement in the fiscal year.
Why BPCL's Triple‑Bottom Recovery Is Fueling an Energy Play
BPCL completed a textbook triple‑bottom pattern, turning a former support zone into resistance. The price now trades above short‑ and medium‑term EMAs and sits near the mid‑Bollinger band, indicating the volatility band is widening in favor of buyers. The RSI at 55 and a positive Rate‑of‑Change (ROC) reinforce the recovery. With the budget expected to lower excise duties on diesel, BPCL could capture additional margin upside, mirroring the 2020 budget‑driven 12% rally in the fuel space.
What BSE's Range Consolidation Ahead of Budget Means for Indices
BSE has been oscillating between Rs 2,650 and Rs 2,950 for several weeks, now positioned in the upper half of that range. The 20‑day SMA sits around Rs 2,750, acting as dynamic support. RSI near 60 and a modest ADX suggest the market lacks a decisive directional push until a breakout occurs. Historically, index ranges prior to the budget have resolved with a breakout to the upside in 70% of cases, delivering a 5‑8% index gain within the first two weeks of the new fiscal year.
Why L&T's Higher‑High Momentum Signals Infrastructure Momentum
Larsen & Toubro continues a clean higher‑high, higher‑low pattern on the weekly chart, confirming a robust primary uptrend. The stock trades above its 20, 50, 100 and 200‑week EMAs, a rare alignment that signals multi‑timeframe strength. The recent pullback to the 50‑week EMA was met with heavy buying, a classic “support‑turn‑resistance” flip. In the infrastructure arena, competitors such as Adani Ports and GMR are still below their 200‑week EMAs, giving L&T a relative advantage. The last similar EMA alignment in 2018 preceded a 30% rally as the government announced a mega‑road‑building scheme.
Why Indus Towers' Bullish Breakout Highlights Telecom Infrastructure Upside
Indus Towers shattered a prolonged sideways box, retesting the breakout zone at the 50‑day EMA before resuming higher. The stock now rides above its 20‑, 50‑, 100‑ and 200‑day EMAs, confirming a dominant uptrend. RSI at 61.9 and a rising momentum histogram suggest buying pressure is still building. Telecom infrastructure stocks have historically outperformed the Nifty during budget cycles that allocate capital for 5G rollout, as seen in 2023 when Indus Towers rallied 19% post‑budget.
Why Axis Bank's Breakout May Define Banking Resilience This Year
Axis Bank broke its previous high with strong volume, staying above all key weekly EMAs. The RSI at 69.4 indicates a powerful bullish surge without clear overbought signs. The Rs 1,320‑1,340 corridor now acts as a support‑turned‑resistance level, a classic “role‑reversal” pattern that offers a clean risk‑reward setup. Peers such as HDFC Bank and ICICI are still testing their 200‑day EMAs, leaving Axis with a technical edge. Historically, a breakout of this magnitude in the banking sector has led to a 10‑12% rally when the budget introduces credit‑flow incentives.
Investor Playbook: Bull and Bear Cases Across the Picks
Bull Scenario: If the Union Budget emphasizes infrastructure spending, renewable incentives, and a reduction in excise duties, the technical setups above could ignite multi‑sector rallies. Expect the indices to breach the Rs 2,950 level within two weeks, driving most of the highlighted stocks to hit or exceed their target levels.
Bear Scenario: A budget that tightens fiscal policy or postpones key reforms could trigger a short‑term sell‑off, testing the stop‑loss levels outlined for each stock. In that case, look for defensive positions in large‑cap banks and energy stocks that retain strong balance sheets.
Regardless of the outcome, the defined entry, target, and stop‑loss points give you a disciplined framework to navigate the volatility around the budget window.