- Indices slipped ~2% after the Union Budget, exposing over‑extended rallies.
- IT stocks showed the strongest resilience, while banks and financials turned sharply negative.
- Technical setups point to clear upside targets for Infosys, LTIMindtree, NMDC and Jindal Steel.
- Conversely, Aditya Birla Capital and Axis Bank present disciplined short‑term bearish opportunities.
- Policy tailwinds in textiles boost Arvind and Raymond, creating fresh upside catalysts.
You missed the budget‑driven sell‑off, and now the market is setting up fresh opportunities.
Why the Budget Shock Is Reshaping Indian Sectors
When the Union Budget 2026 rolled out, the headline‑level fiscal announcements spooked equity investors. The NSE Nifty and Sensex each fell close to 2%, with 1,940 decliners versus just 953 advancers. Such breadth‑wide weakness is a classic sign of a short‑term capitulation, often followed by a consolidation phase near the day‑low. Historically, a 2% drop on a budget day has preceded a 5‑7% rebound within the next 10‑12 trading sessions (see the 2017 and 2022 budgets). The key takeaway: the market is likely to re‑price the new policy environment rather than continue the sell‑off.
From a sector perspective, information technology (IT) absorbed the shock best. The sector’s earnings outlook remains buoyant, supported by increased digital‑government spend and the budget’s focus on data‑centres. Conversely, banks faced headwinds from tighter credit‑cost expectations and the budget’s modest fiscal deficit target, prompting a bearish turn in financials. Healthcare and textiles, meanwhile, are being buoyed by dedicated policy measures that could catalyse medium‑term growth.
Why Infosys Remains a Bullish Play After the Budget
Infosys (CMP Rs 1,654.3) continues to chart higher tops and higher bottoms, a textbook bullish trend. The stock trades above its 20‑, 50‑ and 200‑day moving averages (MAs), indicating strong momentum. The Relative Strength Index (RSI) sits comfortably above 50, confirming buying pressure. Given the IT sector’s defensive posture, Infosys offers a clean entry point at Rs 1,600 with a target of Rs 1,780. A stop‑loss at Rs 1,600 limits downside while preserving upside potential of roughly 11%.
What Max Healthcare's Double‑Bottom Signals for Investors
Max Healthcare (CMP Rs 976.7) has completed a double‑bottom reversal near Rs 940, a pattern that historically yields a 12‑15% upside move after confirmation. The stock closed above its 5‑day EMA and the daily RSI escaped the oversold zone (<30), suggesting momentum is turning. Traders can buy near Rs 940, set a stop‑loss just below the pattern at Rs 925, and aim for Rs 1,100 – a 17% upside.
Aditya Birla Capital: A Short‑Term Bear Target
Aditya Birla Capital (CMP Rs 329.2) breached both its 20‑ and 50‑day EMAs on high volume, a classic bearish signal. The weekly RSI has slid back into the overbought territory, confirming a reversal. Futures positions should be sold at the current level, with a target of Rs 310 and a protective stop at Rs 342, offering a risk‑reward ratio close to 1:1.
LTIMindtree’s Consolidation Breakout Explained
LTIMindtree (CMP Rs 6,070.5) broke out of a tight consolidation range, closing above the 20‑day simple moving average (DMA). Post‑budget, IT is the only sector holding gains, making this breakout particularly meaningful. The next resistance lies between Rs 6,400 and Rs 6,600, while support is anchored at Rs 5,900. A buy at Rs 6,050 with a stop at Rs 5,900 targets a potential 8‑10% move.
Aster DM Healthcare’s Base Formation Insight
Aster DM Healthcare (CMP Rs 570.40) is forming a base after a sharp correction, with price finding support near the previous congestion zone. A modest bullish divergence on the daily chart hints at a short‑term recovery toward Rs 600. Entry around Rs 555 with a stop at Rs 545 provides a clear risk ceiling.
Axis Bank’s Bearish Engulfing Warning
Axis Bank (CMP Rs 1,340.4) displayed a bearish engulfing candle, a pattern that signals potential further downside. The RSI shows negative divergence near the overbought region, confirming weakening momentum. Traders should consider short positions targeting Rs 1,270, with a stop at Rs 1,376.
NMDC’s Inverse Head‑and‑Shoulders Breakout
NMDC (CMP Rs 80.38) completed an inverse head‑and‑shoulders pattern on Dec 23, rallied to Rs 86.72, then corrected. The pullback respected the 100‑day EMA, and a subsequent breakout above a long‑term wedge produced three white‑soldier candles with rising volume – a strong bullish signal. Current price sits above all key EMAs. Buy near Rs 82, target Rs 88‑Rs 92, stop at Rs 76.3.
Power Finance Corp’s Wedge Breakout Potential
Power Finance Corp (CMP Rs 381.5) broke out of a long‑term bullish wedge, supported by strong volume and positive budget commentary on power‑sector reforms. The stock trades above the 20‑ and 50‑day EMAs, though still below the 200‑day EMA, which acts as a longer‑term resistance. A staggered entry above the budget‑day high, with targets at Rs 411 and Rs 428, is justified. Stop‑loss at Rs 356 protects against a false breakout.
Jindal Steel’s All‑Time‑High Breakout
Jindal Steel (CMP Rs 1,102) smashed through its all‑time high after a consolidation from May 2024 to Jan 2026, breaking the Rs 1,080‑Rs 1,100 resistance on rising volume. The stock now sits well above all major EMAs, indicating a robust uptrend. Targets of Rs 1,240 and Rs 1,330 are realistic if the price sustains above the budget‑day high; a stop at Rs 1,050 limits risk.
Arvind’s Textile Policy Tailwinds
Arvind (CMP Rs 330) is forming a base near Rs 330 after a solid rebound. The Union Budget introduced a five‑part textile push – National Fibre Scheme, Textile Expansion & Employment Scheme, Handloom & Handicraft Programme, Text ECON, and SAMARTH 2.0 – all designed to modernise clusters and upgrade skills. These measures underpin a medium‑term structural upside. A decisive close above Rs 347 would trigger targets of Rs 360‑Rs 375. Until then, support sits at Rs 312‑Rs 318.
Raymond’s Early Turnaround Signal
Raymond (CMP Rs 393.7) formed an inverted hammer on the weekly chart, a classic bullish reversal after a downtrend. The MACD histogram shows exhaustion, while RSI is attempting a base. Although the broader trend remains corrective, this pattern suggests a short‑term bounce toward Rs 470, with a stop at Rs 370.
Investor Playbook: Bull vs. Bear Cases
Bull Case: The budget‑induced sell‑off creates a buying window across resilient IT stocks (Infosys, LTIMindtree), commodity‑linked names (NMDC, Jindal Steel) and policy‑favoured sectors (Arvind, Raymond). Technical setups offer upside ranging from 8% to 20% with disciplined stop‑losses.
Bear Case: If fiscal deficit concerns dominate sentiment, financials like Aditya Birla Capital and Axis Bank could see further weakness, justifying short positions. Global risk‑off sentiment could also pressure commodities, pulling back NMDC and Jindal Steel.
Overall, the market’s near‑term trajectory hinges on whether investors interpret the budget as a catalyst or a cautionary signal. By aligning trades with clear technical patterns and sector‑specific fundamentals, you can turn today’s volatility into tomorrow’s profit.