MarketSmith India Unveils Two Key Stock Recommendations for February 6
On Thursday, February 5, 2026, Indian equity benchmarks snapped a three-day winning streak, with the Nifty 50 closing at 25,640.70, down 135.30 points (0.52%), while the Sensex slumped 506.31 points (0.60%) to settle at 83,311.38. Profit booking at elevated levels, coupled with a persistent sell-off in global technology shares and cautious sentiment ahead of the RBI monetary policy decision, weighed heavily on the indices.
Broad Market Overview and Sectoral Performance
Sectoral performance was predominantly bearish. The Nifty Energy and the Nifty Realty indices faced significant pressure, while the Nifty IT remained volatile amid global concerns over AI-led disruptions. Notably, Ambuja Cements and Adani Enterprises saw stock-specific action due to corporate developments, while Westlife Foodworld surged on strong earnings.
Market breadth remained weak, with an advance-decline ratio favouring bears as 2,668 stocks declined and only 1,878 advanced. This highlights the extent of risk-off sentiment across the market.
Detailed Stock Recommendations from MarketSmith India
Buy: Mangalore Refinery and Petrochemicals Ltd (MRPL)
Current Price: ₹182
Why It's Recommended: MRPL is a strategic PSU refiner with an integrated petrochemicals presence. It benefits from access to diversified crude sourcing, including discounted grades, and strong refining margins during favourable crack spread cycles. Its coastal location supports export flexibility and logistics efficiency, while backing from ONGC ensures operational and financial support. Ongoing capacity expansion and upgrade initiatives are improving refinery complexity.
Key Metrics:
- P/E: 14.5
- 52-week high: ₹190.67
- Volume: ₹495.42 crore
- Technical analysis: cup base breakout
Risk Factors: Earnings are highly cyclical and dependent on global GRMs. Government intervention and policy-related pricing pose risks, while high sensitivity to crude oil price volatility impacts profitability. Large capex requirements can strain cash flows at times, and competition from private refiners with superior efficiency remains intense. Environmental regulations, along with energy transition risks, add to long-term uncertainties.
Buy Range: ₹180–184
Target Price: ₹210 in two to three months
Stop Loss: ₹170
Buy: Rain Industries Ltd
Current Price: ₹171
Why It's Recommended: Rain Industries is a leading global producer of calcined petroleum coke and coal tar pitch, supported by an integrated asset base with a global footprint. It benefits from strong demand from the petrochemical and steel sectors, aided by export-led revenue diversification. The company is backed by improving capacities and backward integration initiatives, with a continued focus on cost optimization and operational efficiency.
Key Metrics:
- P/E: NA
- 52-week high: ₹172.99
- Volume: ₹142.05 crore
- Technical analysis: double bottom BSE breakout
Risk Factors: Earnings are highly cyclical and closely tied to global commodity cycles. Volatility in raw material prices such as coke and coal derivatives can impact margins, and foreign currency exposure introduces translation and earnings risks. High leverage and capex intensity may create pressure at times. Environmental and regulatory compliance can increase operating costs, and competition from lower-cost global producers remains a key challenge.
Buy Range: ₹170–173
Target Price: ₹195 in two to three months
Stop Loss: ₹160
Nifty 50 Performance and Technical Analysis
Indian equities closed lower on Wednesday, weighed down by broad-based selling across key sectors amid weak global cues. The Nifty 50 declined 0.52% to settle at 25,642.80, while the Sensex also ended in the red, reflecting cautious investor sentiment through the session.
The benchmark traded in a narrow intraday range but remained under pressure for most of the day, failing to sustain any meaningful recovery. On the sectoral front, the Nifty Metal, Auto, IT, Private Banks, and Consumer Durables led the decline, all losing up to 1%. The Nifty Metal was the worst performer, while FMCG and Financial Services also saw steady sales. On the positive side, PSU Banks and Healthcare indices managed modest gains, offering limited support to the broader market.
From a technical perspective, the Nifty 50 has shown a meaningful improvement in price structure after a volatile phase. The index recently reclaimed both its 100- and 200-DMA in quick succession, signalling a restoration of medium-term trend strength and renewed institutional participation. This recovery momentum propelled the index toward the upper end of its broader trading band, where it briefly approached its all-time high before facing selling pressure, suggesting supply emerging at elevated levels.
Momentum indicators are stabilizing: the RSI has rebounded from lower levels and is currently holding in the neutral-to-positive zone, suggesting improving momentum without entering overheated territory. Meanwhile, the MACD, though still below its signal line earlier, is showing signs of flattening with a nascent positive crossover attempt, pointing to a potential continuation of the recovery if follow-through buying persists.
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. The index has delivered a decisive close above its 100- and 200-DMA in a single move, underscoring a sharp improvement in near- to medium-term sentiment.
However, following the recent euphoric single-day rally, the market is likely to undergo a phase of consolidation as it digests the gains and attempts to form a healthy base at higher levels. Such stabilization would be constructive for the sustainability of the ongoing uptrend.
On the downside, 25,400-25,100 is expected to act as an immediate cushion, where buying interest may emerge on declines. On the upside, 25,800-26,000 represents a strong hurdle for the index, given the supply seen near higher levels. A sustained close above 26,000 would be a key technical trigger and could open the door for further upside toward 26,300-26,400 in the near term.
Nifty Bank Performance Analysis
The Nifty Bank opened on a positive note, reflecting early buying interest, and after slipping to its intraday low, it recovered smartly from lower levels to close in the green, indicating demand-based support. The index opened at 60,163.35, reached an intraday high of 60,389.40, slipped to a low of 59,891.75, and finally settled higher at 60,238.15, registering modest gains for the session.
The recovery from sub-60,000 levels suggests buyers are actively defending key support zones amid recent volatility. Price action indicates a stabilisation attempt above short-term averages, signalling improving confidence. From a broader perspective, the ability to reclaim and hold above 60,000 keeps the short-term structure constructive, although follow-through buying will be critical to confirm strength.
Momentum indicators are showing early signs of improvement. The RSI is placed near 57, comfortably above the neutral 50 mark, indicating strengthening bullish momentum without entering overbought territory. This suggests there is room for further upside if buying interest persists. Meanwhile, the MACD remains marginally positive, with the histogram flattening and hinting at a potential bullish crossover in the coming sessions.
Together, RSI and MACD reflect a gradual shift from consolidation to positive momentum. From a technical standpoint, sustained RSI readings above 55, along with improving MACD structure, often precede short-term trend continuation, provided price holds above key moving averages.
On the downside, immediate support for the Nifty Bank is placed at 59,400-59,500, aligned with the 50-DMA. A decisive break below this could reintroduce selling pressure. On the upside, immediate resistance is seen around 60,400-60,500, while a sustained move above this band could open the door toward 60,900-61,200 in the near term.
Considering improving momentum indicators, price holding above key averages, and stabilising broader market sentiment, the Nifty Bank is expected to trade with a positive bias, with gradual upside attempts if it remains above 59,800.
About MarketSmith India
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. Trade name: William O’Neil India Pvt. Ltd. Sebi Registration No.: INH000015543.
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.
