Nifty IT index, Infosys, TCS at record high; charts signal more upside

Shares of information technology (IT) companies rallied at the bourses on Friday, with the Nifty IT index hitting a record high of 23,408, up 2 per cent, in an otherwise subdued markets. In comparison, the benchmark Nifty50 index was trading 30 points lower at 13,710, at 11:40 AM.

Individually, sector giants Tata Consultancy Services (TCS) and Infosys hit their respective record highs. Besides, Coforge, Larsen & Toubro Infotech, HCL Technologies, Wipro and Tech Mahindra were up in the range of 1 per cent to 3 per cent.

The IT stocks outperformed the benchmarks after Ireland-based Accenture reported strong earnings for quarter ended November 30 (Q1FY21) and revised upwards revenue growth forecast for full fiscal year of 2021 to 4 – 6 per cent from an earlier estimate of 2 – 5 per cent. The company expects operating margin for the full fiscal year to be 14.8–15.0 per cent, an expansion of 10–30bp from fiscal 2020. 

Given this, Edelweiss Securities says that the robust tech up-cycle would benefit firms like HCL Technologies, Infosys, TCS, and Tech Mahindra among large-caps and Mindtree, LTI, LTTS, Persistent, and eClerx among mid- and small-caps. READ MORE

In such a scenario, here's how some of the top IT stocks look on charts

NIFTY IT INDEX: After crossing 22,500 firmly, the index has never seen any major weakness. Now at a new all-time high, over 23,000 levels, the index is set to rally ahead in short-term. The immediate levels come at 23,500 and 25,800. The closing basis support is placed at 23,000 mark. The gap-up opening on December 18, 2020, suggests a positive momentum which, if it receives follow-up buying, may see an aggressive upside.. CLICK HERE FOR THE CHART
 
Infosys Ltd (INFY): The “Ascending triangle” breakout on the daily chart indicates an upside towards Rs 1,300 levels. This is possible if the stock manages to sustain above Rs 1,180 levels. Major upside may be seen above Rs 1,210 levels wherein the Relative Strength Index (RSI) is likely to breakout above the resistance of 65 value. The overall trend stays optimistic till the stock defends Rs 1,150 levels. CLICK HERE FOR THE CHART
 
Tata Consultancy Services Limited (TCS): The weekly chart clearly indicates the support of the gap-up range. The counter did not breach the range of Rs 2,592 to Rs 2,529 levels. Now, a clear reversal crossing earlier high indicates a strong underneath trend with buyers ready to enter corrective phases. The immediate supports come at Rs 2,800 and Rs 2,750 levels. The overall medium-trend is bullish till the counter defends Rs 2,700 levels. CLICK HERE FOR THE CHART

MindTree Limited (MINDTREE): The overall scenario exhibits the support of 50-day moving average (DMA). The counter has rallied higher, while holding the trend along the 50-DMA, since April 2020. So, till the counter defends Rs 1,400 level -- its current 50-DMA -- the trend is expected to be in the upward direction. Secondly, the counter is attempting to hold the horizontal support of Rs 1,425 levels and move towards Rs 1,550 levels. CLICK HERE FOR THE CHART

Coforge Ltd (COFORGE): The counter is gradually climbing higher levels and till the resistance of Rs 2,650 is not conquered aggressively, the upside bias may see some profit booking. The immediate support comes at Rs 2,460 levels. Upon conquering the resistance, the rally may head in the direction of Rs 2,800 levels. CLICK HERE FOR THE CHART

Wipro Ltd (WIPRO):  The counter is failing to cross the gap-down range of Rs 373 to Rs 365 levels and unless the resistance range isn't conquered, the upside bias seems uneasy.  On the downside, till the closing basis support of Rs 350 is held, the counter may attempt to cross the resistance area.  CLICK HERE FOR THE CHART