- IT rally stalls, creating a risk‑off environment that rewards selective plays.
- BEL, Glenmark Pharma and Max Financial show bullish technical patterns despite market jitters.
- Key support zones around 25,600‑25,700 for Nifty suggest limited downside.
- Historical IT corrections have preceded broad market rebounds within 4‑6 weeks.
- Risk management: set tight stop‑losses and monitor US jobs data for Fed‑rate cues.
You missed the IT crash—now’s the moment to capture the rebound.
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Market Watch: 8 Stocks to Buy for Strong Gains
Why the IT Pack Correction Fuels Short‑Term Opportunities
The Nifty 50 slipped 0.57% to 25,807 on Feb 12, dragged down by a sector‑wide selloff in information technology. Heavy US jobs numbers erased hopes of an imminent Federal Reserve rate cut, sending global risk assets lower. While the broader market remains supported by resilient domestic consumption and fiscal optimism, the IT sector’s sharp pullback has temporarily sidelined the bulls.
For investors, a concentrated weakness in a high‑beta sector can create a “flight‑to‑quality” effect, where capital rotates into defensive and fundamentally sound stocks. This rotation is evident in the relative strength of defence, pharma and financial services – three arenas that have shown steady earnings, low leverage and favourable policy tailwinds.
Sector Pulse: Defence, Pharma, and Financial Services Outlook
Defence (BEL) – The defence budget in India is set to rise above 2.5% of GDP by FY25, driven by the government’s ‘Make in India’ push and heightened geopolitical tension. Bharat Electronics (BEL) has outperformed peers, posting a 14% YoY revenue increase and a healthy operating margin of 12% in Q4. Its order book is buoyed by long‑term contracts for radar systems and electronic warfare kits, insulating the stock from cyclical demand swings.
Pharmaceuticals (Glenmark) – Glenmark’s pipeline includes several FDA‑approved generics and a strong presence in the US specialty market. The firm’s gross margin has expanded to 38% after a strategic shift towards higher‑margin specialty drugs. Moreover, the sector benefits from price‑capped domestic sales but gains a significant upside from export revenues, which have grown 22% YoY.
Financial Services (Max Financial) – The micro‑finance niche continues to attract retail credit, with an annualized portfolio growth of 18% and a low non‑performing asset (NPA) ratio of 2.1%. Max Financial’s asset‑light model and digital onboarding have lowered cost‑to‑serve, enhancing profitability even as interest rates hover near historic lows.
Technical Blueprint of BEL, Glenmark & Max Financial
All three stocks exhibit classic continuation patterns that traders watch for in a volatile market.
BEL broke out of a year‑long consolidation near its 20‑day EMA, forming a bullish “ascending triangle.” The price now sits just above the neckline, indicating that a breach of the 475‑rupee target could trigger a short‑term rally. A tight stop‑loss at 428 ₹ respects the recent swing low.
Glenmark has been trading above its 200‑day EMA, a sign of long‑term strength. The recent breakout from a 1,800‑₹ base, combined with a bounce off the 20‑day EMA, creates a “cup‑with‑handle” formation. The suggested target of 2,200 ₹ reflects a ~8% upside, with a stop‑loss at 1,950 ₹ to guard against a false breakout.
Max Financial is in a higher‑highs/higher‑lows sequence, a textbook “uptrend channel.” The stock’s price is near its 52‑week high, and volume has surged on each upward move, confirming buyer conviction. The 1,940 ₹ target aligns with the next resistance band, while a 1,750 ₹ stop‑loss limits downside risk.
Historical Parallels: Past IT Selloffs and Market Recovery
India’s market has seen three major IT corrections since 2010—2013, 2016 and 2022. In each case, the Nifty fell 3‑5% on IT weakness, but within 4‑6 weeks the index reclaimed lost ground, powered by defensive picks and a rebound in foreign institutional inflows.
During the 2016 selloff, defence stocks like BEML and HAL delivered a combined 12% gain, while pharma leaders such as Sun Pharma posted a 9% rally. The pattern repeated in 2022 when micro‑finance houses and pharma stocks outperformed, cushioning the Nifty’s return to the 18,000‑19,000 range.
These precedents suggest that a disciplined, sector‑rotated approach can harvest the upside while the broader market regroups.
Investor Playbook: Bull vs. Bear Cases
Bull Case – If US inflation eases and the Fed signals a pause in rate hikes, risk sentiment will revive. The Nifty could break the 26,000 barrier, unlocking additional upside for BEL, Glenmark and Max Financial. Their strong fundamentals, favorable policy backdrop, and technical momentum would then translate into 10‑15% short‑term gains.
Bear Case – A second round of aggressive US jobs data could push the Fed to tighten further, dragging global risk assets down. In that scenario, the Nifty may retreat to the 25,300‑25,400 support zone, and the three picks could see modest pullbacks of 3‑5%, limited by their stop‑loss levels.
Action Plan – Allocate a modest portion of your portfolio (5‑8%) to each of the three stocks, set stop‑losses as outlined, and monitor the 25,600‑25,700 Nifty support zone. Re‑enter on any bounce off that zone with fresh risk capital, and stay alert to US macro releases.