The rally was primarily underpinned by heavy buying in the banking and energy sectors, with HDFC Bank and Power Grid leading the gainers. However, the IT sector remained a significant laggard for the fourth consecutive session, pressured by persistent concerns over AI-driven disruption and revised capital market exposure norms by the RBI, which hit brokerage stocks like Angel One.
Despite the headline gains, the advance-decline ratio remained weak at approximately 1:1.4 on the BSE, with 1,796 stocks advancing and 2,503 declining, indicating a cautious undercurrent in the broader market. Macroeconomically, January’s WPI inflation rose to 1.81%and a record December trade deficit kept sentiments in check.
Two stock recommendations by MarketSmith India:
Buy: Cummins India Limited (current price: ₹4,525)
- Why it’s recommended: Strong domestic infrastructure and industrial capex cycle, export opportunities, and global integration with Cummins Inc
- Key metrics: P/E: 62.05, 52-week high: ₹4,615, volume: ₹156.22 crores
- Technical analysis: cup base breakout
- Risk factors: Cyclicality in industrial and construction demand, raw material, and commodity price volatility
- buy: : ₹4,500-4,580
- Target price: : ₹Rs 5,250 in two to three months
- Stop loss: ₹4,280
Buy: Godawari Power & Ispat (current price: ₹268)
- Why it’s recommended: Integrated steel operations with captive iron ore and power, capacity expansion in value-added steel products
- Key metrics: P/E:23.43, 52-week high: ₹290 volume: ₹63.34 crore
- Technical analysis: trendline breakout
- Risk factors: Commodity price volatility & input cost risk, regulatory & environmental compliance risk
- Buy at: ₹266–268
- Target price: ₹308 in two to three months
- Stop loss: ₹254
nifty 50 recap
Indian equities closed firmly in the green on 16 February, with Nifty 50 advancing 0.83% or 211.65 points to settle at 25,682.75, after trading in a range of 25,372.70–25,697.00. Sensex mirrored the momentum, supported by broad-based buying across financials, pharma, FMCGand realty.
Sectorally, PSU Banks (+1.50%), Realty (+1.59%), Private Banks (+1.19%), and pharma (+0.94%) led the gains, while auto (-0.73%) and media (-0.87%) lagged. The advance-decline ratio remained tilted toward decliners, with 1,343 stocks advancing against 1,827 declines, indicating selective participation despite headline strength. Mid- and small-cap pockets were mixed though they saw stock-specific traction.
The index delivered a healthy bounce from the 25,400–25,350 zone, reinforcing buying interest at lower levels. Price action indicates a recovery from the recent corrective swing. However, it is currently facing resistance near its 100-DMA, which is capping immediate upside momentum. Momentum indicators are showing signs of improvement.
The RSI has moved higher toward 50–55, reflecting strengthening bullish momentum without entering overbought territory, thereby leaving room for further upward movement. Meanwhile, the MACD has witnessed a positive crossover with histogram bars turning positive, signaling improving momentum after a brief period of weakness.
According to O’Neil’s methodology of market direction, the Indian equity market has transitioned from a Downtrend to a Rally Attempt, indicating an early improvement in the near-term market tone.
Nifty staged a sharp rebound from its key demand zone of 25,350–25,400, highlighting strong buying interest at lower levels and reinforcing the near-term base formation. However, on the upside, the index is approaching a critical supply band in 25,700–25,800, which has historically witnessed consistent selling pressure.
A sustained and decisive close above 25,800 would mark an important technical breakout, potentially reviving bullish momentum and paving the way for a move towards 26,000 in the near term. The broader 25,800–26,000 zone remains a formidable resistance corridor, and any further upside is likely to be tested by supply absorption in this range before a clearer directional trend emerges.
How Nifty Bank Performed
Bank Nifty extended its gains on February 16, advancing 762.45 points or 1.27% to close at 60,949.10, after trading within a range of 59,861.10–61,011.30. The index ended near the day’s high, reflecting sustained buying interest through the session and continued leadership from the banking pack. The move keeps the index firmly positioned near its recent highs, underscoring improving sentiment in financials.
Gains were broad-based across both private and PSU Banks. HDFC Bank rose 2.39%, Axis Bank added 1.93%, and SBI gained 1.01%, providing significant support to the index. Among PSU lenders, Canara Bank climbed 3.05%, Union Bank advanced 2.80%, and Bank of Baroda gained 2.04%, signaling renewed traction in the segment. Kotak Bank (+1.31%), AU Small Finance Bank (+1.49%), and IDFC First Bank (+1.55%) also contributed positively. ICICI Bank was relatively subdued, edging marginally lower by 0.11%, slightly tempering overall gains.
Bank Nifty closed at 60,949.10, extending its bullish trajectory and forming a strong positive candle on the daily chart, reflecting sustained buying interest. The index maintained a pattern of higher-highs and higher-lows, reaffirming the prevailing uptrend. Price action shows a steady climb along its rising short- to medium-term trendline, with the index trading comfortably above its key moving averages, indicating structural strength and continued institutional participation. Momentum indicators further validate the constructive setup.
The RSI has moved higher and is currently placed around 60, signaling strengthening bullish momentum without entering overbought territory, thereby suggesting room for further upside. The RSI’s upward slope also reflects improving price strength following the recent consolidation phase. Meanwhile, the MACD remains in positive territory, with a bullish crossover intact and histogram bars expanding, highlighting accelerating upward momentum.
Bank Nifty is currently trading near its all-time highs, reflecting sustained strength in the ongoing uptrend. On the upside, 61,700–62,000 is likely to act as a key resistance band, where incremental supply may emerge given the index’s extended positioning. A decisive move beyond this range would be crucial to reinforce bullish momentum and signal continuation of the prevailing trend. On the downside, immediate support is placed around the 21-DMA, in the 59,750–59,500 zone, which is expected to act as a near-term cushion in case of interim profit booking.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O’Neil. You can access a 10-day free trial by registering on its website.
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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
