MarketSmith India Unveils Top Stock Picks for 4 February After Historic Market Surge
In a landmark trading session, the Indian equity markets witnessed their strongest single-day rally in recent memory on 4 February, setting a bullish backdrop for investors. MarketSmith India, a premier stock research platform, has capitalized on this momentum by releasing its expert stock recommendations for the day, highlighting two promising buy opportunities.
Historic Market Rally Driven by India-US Trade Deal
The benchmark indices staged an extraordinary performance, with the Nifty 50 surging 640 points, or 2.55%, to close at 25,727. The SENSEX skyrocketed over 2,073 points, or 2.54%, settling at 83,739. This massive breakout was primarily fueled by the landmark India-US trade deal, where Washington reduced reciprocal tariffs on Indian goods to 18%. This development drastically eased long-standing trade uncertainties, triggering aggressive short-covering and renewed foreign institutional interest.
The rally was exceptionally broad-based, as reflected in the stellar advance-decline ratio, with gainers vastly outnumbering losers across the board. Export-oriented sectors took centre stage, with Textiles, Gems & Jewellery, and Speciality Chemicals seeing multiple stocks hitting 20% upper circuits.
MarketSmith India's Stock Recommendations
Amid this optimistic market environment, MarketSmith India has identified two stocks with strong growth potential. Here are the detailed recommendations:
Buy: eClerx Services Limited
Current Price: ₹4,925
Why It's Recommended: eClerx Services boasts a strong niche presence in data analytics and process management, supported by a high-margin business model with consistent cash generation. The company maintains a debt-free balance sheet and has long-term contracts with global clients, ensuring stable revenue streams. Healthy return ratios, including robust ROE and ROCE, along with stable promoter holding, further bolster its investment appeal.
Key Metrics:
- P/E Ratio: 34.02
- 52-Week High: ₹4,995.00
- Volume: ₹65.58 crore
Technical Analysis: The stock has shown a double-bottom breakout, indicating potential upward momentum.
Risk Factors: Investors should note revenue concentration from a limited set of large clients, high dependence on the BFSI and e-commerce sectors, currency volatility impacting earnings, intense competition in the analytics/KPO space, talent retention and wage inflation risks, and slower growth during global economic downturns.
Investment Strategy:
- Buy Range: ₹4,900-4,950
- Target Price: ₹5,500 in two to three months
- Stop Loss: ₹4,630
Buy: S.J.S. Enterprises Ltd
Current Price: ₹1,741
Why It's Recommended: S.J.S. Enterprises is a leader in decorative aesthetics solutions for the automotive and appliances industry, with a strong product portfolio across decals, badges, overlays, and in-mould labels. The company has demonstrated consistent revenue and profit growth, outperforming industry standards. High margins and healthy ROCE/ROE ratios, coupled with reduced or low debt and improving financial health, make it an attractive pick. Its export presence and diversification into new products and segments, along with premium clientele and long-term OEM partnerships, add to its strengths.
Key Metrics:
- P/E Ratio: 33.47
- 52-Week High: ₹1,869.00
- Volume: ₹38.93 crore
Technical Analysis: The stock exhibits a cup-with-handle breakout, suggesting bullish potential.
Risk Factors: Valuation appears high versus intrinsic value with rich multiples, earnings are dependent on auto industry cyclicality, promoters hold relatively low and slightly declining stakes, working capital pressure has been observed in past reported data, competition in the auto ancillaries and aesthetics space is intense, and there is exposure to raw material and commodity price volatility, along with social and labour risks in operations.
Investment Strategy:
- Buy Range: ₹1,725-1,760
- Target Price: ₹1,980 in two to three months
- Stop Loss: ₹1,620
Nifty 50 Performance and Technical Outlook
On 3 February, Indian equities ended the session on a strong note, with benchmarks extending their recent uptrend amid broad-based buying. The Nifty 50 surged 2.55% to close at 25,727.55, adding 639 points over the previous close. The rally was underpinned by robust participation across sectors, as reflected in a healthy advance-decline ratio: 2,694 stocks advanced, 534 declined, and 90 remained unchanged, indicating a clear risk-on sentiment.
From a technical perspective, the Nifty 50 has shown 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. Momentum indicators are stabilizing, with the RSI rebounding from lower levels and holding in the neutral-to-positive zone, while the MACD shows signs of a nascent positive crossover.
According to O’Neil’s methodology, the Nifty 50 remains in a downtrend, but traders should remain selective and prioritize risk management. The index is likely to enter a phase of consolidation following the recent euphoric rally. On the downside, 25,400-25,100 is expected to act as immediate support, while on the upside, 25,800-26,000 represents a strong hurdle. A sustained close above 26,000 could open the door for further upside toward 26,300-26,400 in the near term.
Nifty Bank Performance
The Nifty Bank opened on a strong positive note, registering a sharp gap-up and maintaining positive momentum throughout the day. It closed firmly at 60,041, marking a robust gain of 1,422 points, or 2.43%. The rally was broad-based, with buying interest visible across all major banking constituents, supported by positive global cues and improved risk sentiment.
Momentum indicators present a cautiously constructive picture, with the RSI around 56 and the MACD histogram turning positive, suggesting a short-term trend reversal may be unfolding. Immediate support is placed near 59,300, with resistance seen near 60,500 and a key supply zone in 61,700-62,000. In the near term, the index is expected to remain volatile but retain a positive bias.
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. The platform is operated by William O’Neil India Pvt. Ltd., with SEBI Registration No.: INH000015543.
Disclaimer: The views and recommendations given in this article are those of individual analysts and do not represent the views of Mint. Investors are advised to consult certified experts before making any investment decisions.
