Stocks that rebound quickly after a market crash often signal underlying strength and have a higher probability of continuing their upward move.

Man Industries, has rallied more than 30% following the recent market correction. Technically, the stock is forming an inverse head and shoulders pattern on the point-and-figure charts, indicating a potential trend reversal. In addition, it has delivered a breakout on its relative strength chart against the Nifty 500, suggesting clear outperformance versus the broader market.

Price Chart

RS Chart

Kirloskar Oil Engines has given an all time high Breakout on both the Price and Relative chart w.r.t Nifty 500.

Price Chart

RS Chart

Looking at the relative strength of Nifty IT vs Nifty 500, the ratio is currently approaching an important support zone.

Historically, this level has acted as a base where the sector either stabilizes or begins to outperform. This makes the current setup interesting from a risk-reward perspective, especially if we start seeing supporting signals internally.

Strength Within the Sector

Finding the stocks which have shown good performance during this time using RSI in weekly time frame could help us find the potential stocks with good strength. To validate this, we can use the Indicator Digger in RZone with a weekly setup, focusing on RSI, specifically looking for stocks where the RSI is above 50 along with a rising RSI, and also where it is crossing above its moving average. This helps in identifying strength and improving momentum on the upside.

To avoid potential fakeouts, we can only consider stocks with RSI values higher than 55, ensuring that the momentum is more decisive and not just marginally bullish.

Here are the first four stocks in this list with their price charts and Relative Strength Ratio Chart.

ZENTEC

DSSL

SIGMAADV

INFOBEANS

The pharma sector has been performing better than the overall market recently, as it is falling less during market corrections.
Stocks trading near their 52-week highs usually show strong strength in such market conditions.
Using the RZone Price Scanner to check for 52-week high stocks in the pharma sector, two stocks stood out: Bliss GVS and Venus Remedies. Both are trading at their all-time highs and have also shown breakouts on their relative strength charts compared to the Nifty Pharma Index.

Venus Remedies

BLISSGVS

The risk reward does not seem very favourable as of now, but the stock will look lucrative once it gives a small retracement in column of O and later gives a follow-through buy signal.