Mindtree, Coforge: These IT stocks look good on charts despite correction

Despite the current corrective phase in IT sector, the overall positive bias seems to be intact for these IT stocks as they hold crucial support levels

IT shares have been under selling pressure since the start of the earnings season, largely driven by earnings disappointment by TCS. In the week gone by, the selling pressure accentuated and select stocks like Coforge and Mindtree witnessed a steep correction. While the former plunged nearly 20 per cent, the latter declined 14 per cent. The IT index itself corrected by over 6 per cent.

However, the negativity has not been able to dismantle the positive bias as these stocks are holding their crucial support levels. The IT index is trading up over 45 per cent on year to date basis. Several stocks like Coforge Ltd, MindTree Limited, L&T Technology Services Limited have doubled during the same tenure.

NIFTY IT INDEX
Likely target: 36,000 and 36.500

Upside potential: 1.50 % to 2.80%

The index is seen holding the support of 50-day moving average (DMA) placed at 35,100 level. As long as this level is upheld, there shall be chances of a positive reversal, with upside target of 36,000 and 36.500 levels. The daily chart structure reflects a likely accumulation range of 35,000 to 34,500 levels. CLICK HERE FOR THE CHART
 
Tech Mahindra Ltd (TECHM)
Likely target: Rs 1,800
Upside potential: 11%

Today, the stock has witnessed a strong gap-up opening, with a breakout above Rs 1,570 level. Thus, the fresh trigger now indicates that the stock is ready to move towards Rs 1,800. The immediate support for the stock exists at Rs 1,550 and Rs 1,480 levels, as per the daily chart. The Moving Average Convergence Divergence (MACD) reversed immediately after dipping below the zero line reflecting a strong upward direction in the upcoming session.  CLICK HERE FOR THE CHART

L&T Technology Services Limited (LTTS)
Outlook: Range bound trading

As long as the stock does not breach Rs 4,400 level, the bearish sentiment may not witness any aggressive phase. On the flip side, until the obstacle of Rs 5,000-mark is not conquered decisively, we may not see extreme bullishness either. The recent weakness has not seen aggravated volumes reflecting that the market participants’ respect towards the support of Rs 4,400 level.  CLICK HERE FOR THE CHART

Coforge Ltd (COFORGE)
Likely target: Rs 5,400   
Upside potential: 6.50%

After breaching the 50-DMA placed at Rs 5,271 level, the stock held the support of 100-DMA located at Rs 4,800 in yesterday's trading session. This is a clear indication of the positive momentum and accumulation at 100-DMA. So as long as this support is held, the reversal may see an up move towards Rs 5,400 level, according to the daily chart. CLICK HERE FOR THE CHART

 
Mindtree Limited (MINDTREE)
Likely target: 5,150 (above Rs 4,800)
Upside potential: 8%

The shares of MindTree Limited have a strong accumulation support at Rs 4,100 level, according to the candlestick formation on the daily chart. Although, the technical indicators are exhibiting negative crossovers, the price formations are not supportive of the negative decline. On the higher side, a promising close above Rs 4,800 level may result in a breakout that could see an upside towards Rs 5,150 level.  CLICK HERE FOR THE CHART