TCS, Infosys: These IT stocks may help Nifty50 claim new high

An up move above 26,000 levels may trigger a rally towards 27,000-mark in the Nifty IT index

Indian IT stocks caught investor fancy on Wednesday, buoyed by an overnight rally in tech stocks in the United States. Tech-heavy Nasdaq gained about 4 per cent on Wall Street on Tuesday with Tesla Inc jumping 20 per cent, the most in almost a year, while Amazon.com Inc and Microsoft Corp posted the biggest single-day gains in five weeks. 

Consequently, the Nifty IT index back home was outperforming the benchmark Nifty50 index. At 11:26 am, the Nifty IT index was ruling 1.4 per cent higher at 25,936.5 leves, having touched a high of 25,984 levels in the intra-day deals. Among individual stocks, shares of KPIT Technologies, L&T Technology Services (LTTS) and Mindtree hit their respective record highs on the BSE in intra-day trade.

Besides, Coforge surged nearly 7 per cent to Rs 2,750, while Larsen & Toubro Infotech gained 4 per cent to Rs 4,070 in intra-day trade on the BSE. Zensar Technologies, LTTS, Wipro, Mindtree and Mphasis were up in the range of 2 per cent to 3 per cent, while, Infosys, HCL Technologies and Tech Mahindra were up between 1 per cent and 2 per cent. READ ABOUT IT HERE

The Indian IT services industry reported one of its strongest third quarters in FY21, delivering USD revenue growth of 4.9 per cent quarter on quarer, helped by increased technology spends across all key industries (despite adverse seasonality), pick up in deal sizes, and faster conversion from pipeline to orders.

Analysts at Motilal Oswal Financial Services continue to see Cloud migration, Digital transformation, and user experience as multi-year opportunities for Indian IT companies. These will be complimented by cost takeout deals as clients normalize their budgets to increase spending on Digital transformation.

Against this backdrop, here is how IT stocks looking on charts:

NIFTY IT INDEX: The index is attempting to cross the zero line on the Moving Average Convergence Divergence (MACD), on the upside, in a bid to breakout above the 50-days moving average (DMA). An up move above 26,000 levels, therefore, may see a rally towards 26,500 mark and 27,000. The 50-DMA is currently placed 25,600 levels, which becomes the immediate support. The gap up start on March 10, 2021 shows a positive momentum which may support the strength above 26,000 levels, as per the daily chart. CLICK HERE FOR THE CHART

Coforge Ltd (COFORGE): With a breakout above the immediate resistance of Rs 2,700 levels, the stock is expected to gain momentum above Rs 2,760 levels. This rally may even extend towards Rs 2,850 mark, as per the daily chart. The bullish divergence on the Relative Strength Index (RSI), too, shows that the stock is likely to gain strength on the upward breakout. The support comes at Rs 2,620 levels. CLICK HERE FOR THE CHART

Tata Consultancy Services (TCS):  The stock has a trendline resistance around Rs 3,130 levels. Once this resistance is decisively conquered, the upside bias may see a rally towards Rs 3,220 and Rs 3,300 levels. That said, the current scenario indicates a sideways movement in the stock. Nonetheless, the RSI is indicating an upside bias with a double bottom breakout, as per the daily chart. The support comes at Rs 3,000 levels. CLICK HERE FOR THE CHART

Infosys Ltd (INFY): The stock of this IT bellwether needs to successfully close above Rs 1,370-mark to see a fresh breakout which is supported by RSI and MACD. The RSI has made a "double bottom" formation while the MACD is firmly holding the upward bias above the zero line indicators. A positive breakout may see a rally towards Rs 1,420 levels, which would support to claim a new all-time high. The closing basis support stays at 1,340 levels. CLICK HERE FOR THE CHART
 
Wipro Ltd (WIPRO):  The daily chart structure, which looks indicative weak, indicates that the stock needs to close above Rs 430 to initiate a buying sentiment. However, as long as the stock sustains and holds Rs 400-mark, the upside bias may revive in the near-term. The bigger upside is above the breakout of Rs 445 levels, as per the daily chart.Supported by a strong momentum since March 8, 2021, the mid-cap IT stock has claimed a new all-time of Rs 1,850 levels. Stability above Rs 1,800 mark may, threfore, see strong participation from investors. Also, the MACD has successfully held the upward direction above the zero line which suggests build-up of strength on the upside. CLICK HERE FOR THE CHART

MindTree Limited (MINDTREE): The counter has seen a strong momentum from yesterday 08, March 2021. This up move has claimed a new all-time of Rs 1,850 levels. Stability above Rs 1,800 mark may see market participants taking interest in the counter. Secondly, the MACD has successfully hold the upward direction above the zero line, this suggest the positive sense of gaining strength in the rising direction. CLICK HERE FOR THE CHART