Infosys, Wipro, TCS: Charts suggest more upside potential for IT stocks

For Nifty IT, the immediate support comes in at 16,400 levels on a closing basis and the rally should move towards 17,500 and 17,700 levels.

Shares of IT companies jumped up to 12.5 per cent on Thursday after sector majors Infosys and Wipro reported better-than-expected results for the quarter ended June 2020 (Q1FY21). The Nifty IT index advanced over 5.5 per cent to 17,373 levels with 9 out of 10 constituents trading in the green. 

Here's a look at what technical indicators suggest for IT stocks and how you should trade them -

NIFTY IT: On Wednesday, the index climbed a high of 16,624 levels, approximately 260 points away from a lifetime high. Now, with an opening above 16,884 at a new all-time high today, the trend gets highly positive with index filling all the negative gaps and strongly continuing to move further. After crossing 200-day moving average (DMA), the index has not seen any correction; the price is undoubtedly showing strength even when RSI has entered overbought condition. The immediate support comes in at 16,400 level on closing basis and the rally should move towards 17,500 and 17,700 levels. CLICK HERE FOR THE CHART
 
Infosys Ltd (INFY): As the counter freezes at 10 per cent upper circuit today, the optimism has risen strongly. A new all-time high has attracted more interest with volumes showing strength. Going forward, Rs 800 becomes a crucial support for a rally towards Rs 1,100 levels, a medium-term perspective. The immediate support comes in at Rs 865 levels. The Moving Average Convergence Divergence (MACD) has risen above the zero line on the weekly chart, which suggests strong upward bias. CLICK HERE FOR THE CHART
 
Wipro Ltd (WIPRO):  An Ascending triangle breakout, price stabilising above 200-DMA and 50-DMA, and crossing 100-DMA, all these signal a positive upside ahead from a medium-term perspective. The overall trend is moving towards Rs 300 levels. The immediate support is at Rs 250 with Rs 230 staying as medium-term support levels. CLICK HERE FOR THE CHART
 
Tata Consultancy Services Ltd (TCS):  As it scaled a new all-time high last week, similar momentum can be seen now. Today, a new all-time high has further boosted the optimistic sentiment. A positive crossovers of 50-DMA, 100-DMA with 200-DMA have further strengthened the upside move. Till the stock trades above Rs 2,120 on closing basis, the medium-term outlook may see Rs 2,500 levels. The overall outlook remains bullish with immediate support coming in at Rs 2,190 levels. The volumes have indicated normal fluctuations and swings have seen price moving higher levels. CLICK HERE FOR THE CHART

Mindtree Ltd (MINDTREE): The overall trend remains positive till the counter trades above Rs 940 levels. The immediate resistance is at Rs 1,050 with support standing at Rs 970 levels. The gradual rise in price shows stable upside which has witnessed swings in volume. Until price does not show volume base sell-off, the upside trend should remain intact. CLICK HERE FOR THE CHART