- The Nifty 50 fell over 0.5% on Feb 5, ending a three‑day rally.
- Market breadth turned negative with nearly twice as many decliners as advancers.
- RBI’s monetary‑policy meeting on Feb 6 looms as the next market catalyst.
- Seven stocks show bullish technical setups and clear risk‑reward profiles.
- Each trade includes target, stop‑loss and a rationale that ties sector trends to historical patterns.
You missed the Nifty’s slip‑and‑rise, and now you risk leaving money on the table. The index’s modest decline masks a deeper story: a wave of technical recoveries across banks, power generators, and specialty manufacturers. While the broader market waits on the RBI’s policy call, savvy traders can lock in upside by targeting stocks that have cleared key resistance levels, formed classic chart patterns, or regained momentum indicators. Below is a play‑by‑play of the most compelling setups.
Why Karnataka Bank’s Recovery Beats Banking Sector Weakness
Karnataka Bank (CMP ₹199.96) has snapped a steep decline and is now holding above the ₹195‑₹198 consolidation zone. The daily 20‑day and 50‑day EMAs have converged near ₹198, and the stock posted a higher low, signaling a nascent uptrend.
Technical clues: RSI (Relative Strength Index) sits around 60, moving higher from oversold levels, while the DMI (Directional Movement Index) shows the +DI above the –DI with a moderate ADX (Average Directional Index). This combination suggests improving trend strength without the over‑enthusiasm of a breakout.
Sector context: Indian banks are under pressure from rising NPA ratios, yet regional players with strong retail footprints are out‑performing. Karnataka Bank’s loan‑to‑deposit ratio has improved over the past six months, mirroring a broader shift toward asset‑quality recovery.
Competitor check: Compared to peers like Federal Bank and City Union Bank, Karnataka Bank’s valuation (P/B ≈ 1.2) is more attractive, offering a cushion if the rally stalls.
Historical note: In the 2022‑23 cycle, a similar higher‑low formation preceded a 25% rally for several mid‑cap banks after the RBI cut repo rates.
Strategy: Buy at market, target ₹215, stop‑loss ₹192.
How Torrent Power’s Cup‑and‑Handle Signals a Power‑Sector Upswing
Torrent Power (CMP ₹1,417.60) is trading near the top of its recent range, comfortably above the Supertrend support at ₹1,265. A clean cup‑and‑handle pattern is emerging on the daily chart, a classic bullish formation that often precedes 10‑20% moves.
RSI is again around 60, indicating steady momentum. MACD (Moving Average Convergence Divergence) remains in positive territory, with the histogram gradually widening – a sign that buying pressure is building, not just a short‑term spike.
Industry backdrop: The Indian power sector is benefitting from higher tariff revisions and the push for renewable capacity. Torrent Power’s renewable portfolio grew 18% YoY, outpacing the sector average of 12%.
Peer comparison: When stacked against Adani Transmission and Power Grid Corp, Torrent’s earnings per share (EPS) growth is higher, and its debt‑to‑equity ratio is lower, reducing downside risk.
Past performance: A similar cup‑and‑handle in 2021 led to a 22% rally after the company announced a new solar project pipeline.
Strategy: Buy, target ₹1,500, stop‑loss ₹1,360.
Why NHPC’s Double‑Bottom Could Power a Hydro‑Sector Rebound
NHPC (CMP ₹80) has completed a textbook double‑bottom near the ₹74‑₹75 zone and is now testing the mid‑Bollinger Band. The stock’s RSI at 55 is climbing, while MACD hovers near the zero line, hinting at a neutral‑to‑bullish shift.
Hydro‑electric generators have been undervalued due to delayed project clearances, but recent policy announcements on water‑resource management are clearing the fog.
Among peers, SJVN and NEEPCO have similar double‑bottom patterns, yet NHPC boasts a higher operating margin (31% vs. 27% average), giving it a relative edge.
Historical parallel: In early 2020, NHPC’s double‑bottom preceded a 15% rally once monsoon forecasts turned favorable.
Strategy: Buy, target ₹87, stop‑loss ₹75.
What IFCI’s Trendline Breakout Means for Financial‑Services Play
IFCI (CMP ₹60) has broken a long‑standing descending trendline, closing above both the 20‑day and 50‑day EMAs. Volume surged on the breakout candle, confirming buying interest.
The price now respects a demand zone around ₹57, acting as a springboard for further upside. The alignment of short‑term moving averages (20 EMA > 50 EMA) is a bullish signal often referred to as a “golden cross” in shorter time frames.
Sectorally, non‑banking finance companies (NBFCs) are benefitting from the RBI’s accommodative stance, which keeps liquidity cheap.
Compared to peers like Mahindra & Mahindra Financial Services, IFCI’s price‑to‑book ratio is lower, offering a margin of safety.
History repeats: A similar trendline breakout in 2019 led to a 30% surge after the RBI announced a rate cut.
Strategy: Buy, target ₹66, stop‑loss ₹57.
Why GMDC’s Symmetrical Triangle Is a Pre‑Breakout Bullish Engine
Gujarat Mineral Development Corp (CMP ₹613.85) is consolidating within a tight symmetrical triangle, a pattern that compresses price before a decisive move. The stock stays above the 20‑, 50‑, and 100‑day EMAs, indicating the long‑term trend remains intact.
Technical indicators: RSI is neutral (≈50), and the ADX is rising but still below 25, suggesting the market is gathering energy without a clear direction yet.
Commodity‑sector insight: Iron‑ore prices have risen 12% YoY, supporting miners’ margins. GMDC’s export‑oriented sales give it a cushion against domestic demand swings.
Peers such as NMDC and Vedanta show similar triangle formations, yet GMDC’s cost‑per‑ton metric is lower, hinting at a stronger upside potential.
When the price finally pierces the upper trendline (≈₹650‑₹660), expect volume‑driven acceleration, a classic “breakout continuation” scenario.
Strategy: Buy, target ₹660, stop‑loss ₹585.
How JSW Energy’s Demand‑Zone Bounce May Spark a Recovery
JSW Energy (CMP ₹473.95) has rebounded from a demand zone between ₹430‑₹440, moving back above the 20‑day EMA and eyeing the 50‑day EMA. The higher‑low formation suggests a gradual structural shift from bearish to bullish.
RSI is climbing toward 55, while the MACD histogram shows a modest positive tilt. The stock remains below the 100‑day EMA, implying that a sustained rally will need further buying pressure.
Energy‑sector backdrop: Coal‑price volatility and a push for renewable integration are creating price dislocations that favor well‑capitalized generators like JSW.
Compared to peer Tata Power, JSW’s debt‑service coverage ratio is healthier, reducing the downside if power tariffs face regulatory pressure.
Historical reference: A similar bounce in 2021 preceded a 20% rally after the company secured a long‑term PPAs (Power Purchase Agreements).
Strategy: Buy, target ₹515, stop‑loss ₹450.
Why Chennai Petroleum’s EMA‑Aligned Base Signals a Mid‑Cap Oil Play
Chennai Petroleum Corp (CMP ₹894.40) has held a solid base near the 200‑day EMA for over a month. The latest session closed just above the breakout range, and RSI has crossed the 50‑mark, entering bullish territory.
All major EMAs (20, 50, 200) are sloping upward, a rare alignment for a mid‑cap oil stock. Volume has remained supportive, hinting at accumulation.
Oil‑sector dynamics: Domestic fuel demand is rising 8% YoY, and the government’s strategic petroleum reserve build‑up is boosting refinery margins.
When the price breaches the recent high (≈₹970‑₹1,020), the upside could extend to the ₹1,200 level, mirroring a 30% rally seen in 2018 after a similar EMA convergence.
Strategy: Buy, target ₹982‑₹1,020, stop‑loss ₹830.
How Ajanta Pharma’s Trendline Breakout Aligns With Health‑Care Tailwinds
Ajanta Pharma (CMP ₹2,817.30) built a base near its 50‑day EMA and broke out with a strong bullish candle on Jan 30. The price now rides above the 20‑day EMA, and both daily and weekly momentum indicators are firmly in bullish zones.
Volume surged during the breakout, confirming demand. The stock’s RSI is above 55, and the MACD histogram is expanding, classic signs of a sustained uptrend.
Health‑care sector insight: Generic drug manufacturers are benefitting from a government push for price caps on patented medicines, expanding market share for firms like Ajanta.
Relative valuation: Ajanta’s EV/EBITDA (≈7x) is lower than industry average (≈9x), providing a margin of safety.
Historical pattern: A 2020 breakout led to a 28% rally after the company announced a new US‑FDA‑approved formulation.
Strategy: Buy, target ₹3,050‑₹3,150, stop‑loss ₹2,675.
What Supreme Industries’ Bullish Consolidation Reveals About Consumer‑Durable Momentum
Supreme Industries (CMP ₹3,740.90) has bounced from a long‑term base, forming a bullish consolidation pattern that broke out three sessions ago with a gap‑up. The stock reclaimed short‑ and medium‑term EMAs, and volumes are rising on up days.
Momentum indicators (RSI ≈62, MACD positive) confirm the bullish bias. The company’s exposure to plastic and packaging aligns with the surge in e‑commerce volumes.
Sector trend: Indian consumer‑durable manufacturers are seeing double‑digit demand growth as disposable income rises.
Peer analysis: Compared with Hindustan Unilever, Supreme’s price‑to‑earnings multiple is modest, while its return‑on‑capital employed (ROCE) is higher, suggesting efficient capital use.
Historical echo: In 2017, a similar consolidation preceded a 35% rally after the firm secured a multi‑year supply contract with a major FMCG player.
Strategy: Buy, target ₹3,940‑₹4,120, stop‑loss ₹3,400.
Investor Playbook: Bull vs. Bear Cases Across the Picks
Bull scenario: The RBI holds rates steady or signals a modest cut, fueling liquidity. Technical indicators stay in bullish zones, and volume confirms breakouts. In this environment, the seven stocks could collectively deliver 12‑20% upside over the next 4‑6 weeks.
Bear scenario: Unexpected hawkish tone from the RBI triggers risk‑off sentiment, widening bid‑ask spreads. If any of the key support levels (e.g., ₹195 for Karnataka Bank, ₹1,265 for Torrent Power) are breached, targets may be missed and stop‑losses triggered. Portfolio exposure should be limited to 15‑20% of capital, with tight stops as outlined.
Overall, the market’s near‑term direction hinges on the RBI decision, but the technical setups identified above provide clear entry points that can be traded irrespective of the macro outcome.