The rally was underpinned by a late-session surge in PSU Banks and Metals, with the Nifty PSU Bank hitting a fresh high on the back of robust Q3 earnings. Tata Steel, ITC, and Axis Bank were among the top large-cap gainers, effectively offsetting a slump in the IT index, which fell amid AI disruption fears weighing on heavyweights like Infosys and Wipro. The overall market breadth remained positive, reflecting broad-based interest across segments.
On the NSE, the advance-decline ratio stood at approximately 1.17:1, with 1,715 shares advancing and 1,458 shares declining. Easing volatility, with the India VIX cooling by over 6% to 13.53, suggests a period of stable consolidation with a positive bias as investors pivot toward domestic-facing cyclicals.
Two stock recommendations by MarketSmith India:
Buy: Hitachi Energy India Ltd (current price: ₹874)
Why it’s recommended: India’s accelerating transmission and renewable integration capex cycle supports strong order inflows and multi-year revenue visibility opportunities, high earnings growth momentum, technology leadership in HVDC, transformers, and grid automation, enabling participation in large and complex EPC projects.
Key metrics: P/E: 121.74 | 52-week high: ₹23,700 | Volume: ₹₹309.18 crore
Technical analysis: cup base breakout
Risk factors: Execution and working capital risks in large fixed-price turnkey transmission projects, margin pressure from aggressive competitive bidding, and commodity cost volatility (copper, steel).
Buy: ₹23,400-23,700
Target price: ₹27,000 in two to three months
Stop loss: ₹22,200
Buy: Laurus Labs Ltd (current price: ₹1,037.45)
Why it’s recommended: Expansion of high-margin CDMO business with increasing share of commercial-stage molecules, capacity additions across APIs, formulations, and biologics, driving diversification and operating leverage.
Key metrics: P/E:64.99 | 52-week high: ₹1,141 | Volume: ₹146.76 crores
Technical analysis: tight area breakout
Risk factors: Pricing pressure in ARV and generic APIs impacting margins, revenue volatility from customer concentration and delays in CDMO commercialization.
Buy at: ₹1,030-1,040
Target price: ₹Rs 1,200 in two to three months
Stop loss: ₹995
How the Nifty 50 performed on 18 February:
Indian equities ended on a firm note, with the Nifty 50 rising 0.37% (+93.95 points) to close at 25,819.35, after trading in a 25,645-25,828 range through the session. The index sustained above the previous close of 25,725.40, indicating steady buying interest in the latter half of trade. Broader market breadth remained positive, with 1,714 stocks advancing and 1,457 stocks declining (109 unchanged), reflecting selective accumulation across sectors. Sectorally, FMCG, Metals, PSU Banks, and Financial Services led the gains, while IT emerged as the key drag, capping sharper upside.
The Nifty 50 continues to exhibit constructive price action, closing at 25,819 with a higher-high and higher-low formation on the daily chart. The index is now trading above its 20-, 50-, 100-, and 200-DMAs, with the shorter-term averages turning upward, reflecting improving momentum and trend alignment. Notably, volumes have expanded over the past three sessions, validating the strength of the current upswing and suggesting institutional participation. The RSI has rebounded to 53.9, crossing above its signal average and moving decisively out of the lower band, signaling strengthening bullish momentum without entering overbought territory.
Meanwhile, the MACD has generated a positive crossover and is sustaining above the zero line, with histogram bars expanding, reinforcing the continuation of upward momentum.
According to O’Neil’s methodology of market direction, the Indian equity market transitioned from a Downtrend to a Rally Attempt, indicating an early improvement in the near-term market tone.
The 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 25,800-26,000, which has historically witnessed consistent selling pressure. A sustained and decisive close above 26,000 would mark an important technical breakout, potentially reviving bullish momentum and paving the way for a move toward 26,300 in the near term. That said, the broader 25,80-26,000 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 did Nifty Bank perform yesterday?
The Nifty Bank demonstrated exceptional relative strength on Wednesday, outperforming the broader benchmarks to settle at 61,550.80, gaining 0.62%. Despite marginal profit-booking in heavyweights like HDFC Bank and ICICI Bank, the index maintained its upward trajectory, bolstered by a 1.3% surge in the Nifty PSU Bank Index, which touched a new lifetime high.
High-momentum gains in PNB (+2.58%), IDFC First Bank (+2.40%), and AU Small Finance Bank (+2.38%) underlined broad-based institutional accumulation in the banking sector. Technically, the index’s ability to close near its intraday peak of 61,596 suggests strong bullish undertones. With the India VIX cooling by over 6%, the outlook remains constructive, as the banking gauge gears up for a potential breakout towards the 61,800-62,000 resistance zone in the coming sessions.
The Nifty Bank continues to demonstrate strong bullish price action, closing at 61,550.80, marking a fresh all-time high and extending its prevailing uptrend. The index has registered a higher-high and higher-low, reflecting sustained buying interest and trend continuation. It is trading firmly above all its key moving averages. Momentum indicators further reinforce the bullish setup: the RSI has advanced to 64.86, holding in a strong zone without entering extreme overbought territory, indicating healthy momentum with room for continuation. Additionally, the MACD remains in positive territory with a widening gap between the MACD and signal lines, and expanding histogram bars, confirming strengthening upside momentum.
From a technical perspective, the immediate support is placed around 60,000, which aligns with the confluence of the 21-DMA, making it a key demand zone from a trend-following standpoint. The index is currently trading at record-high levels, reflecting strong underlying momentum and sustained institutional participation. Given the prevailing bullish structure and alignment of key moving averages, any interim pullbacks toward this zone are likely to attract buying interest. In the context of the ongoing uptrend, such dips may be viewed as incremental accumulation opportunities rather than signs of structural weakness.
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.
