Trading Idea: Are IT stocks on its last leg of the rally?

Check out the trading strategies with Mohit Gaba,Independent technical analyst & trader.

Software exporters have rallied extensively in past few weeks on back of weak rupee that may help imrpove their margins.

At 10:30AM, BSE-IT index rose 1.5 per cent compared to 0.7 per cent rise in th benchmark Sensex index.

So should you keep banking on the IT stocks to make money or is this rally on the verge of getting over?

Check out the trading strategies with Mohit Gaba,Independent technical analyst & trader.

Smartinvestor : Markets are pretty volatile after yesterday's pull-back. How are you approaching trades today?

Mohit Gaba : So far the market has been pretty sideways, and until the GDP numbers come out today, I expect the market to be range bound.

Smartinvestor : Bank Nifty has been under tremendous pressure in the recent market carnage. What should be an ideal target that one can use to short Bank Nifty?

Mohit Gaba : I expect a consolidation or small pull back to this massive down trend. If we see a jump up to 9500 - 9600 then that would be a good place to go short.

Smartinvestor : What is your view on auto majors such as Tata Motors and Maruti Suzuki?

Mohit Gaba : Tata motors has been range bound between 260 - 330, this range bound movement could continue. Maruti is in a down trend and so far there is no sign of strength, hence it is not yet a buy.

Smartinvestor : Does IT stocks offer safe haven in the current market and what are your picks here?

Mohit Gaba : IT stocks are the best bet in these market conditions, One could look at Wipro or TCS within this sector.

Smartinvestor : What are your targets for Wipro and TCS?

Mohit Gaba : One should ride this upmove with trailing stop losses, for Wipro it could be 458 and for TCS 1915.

Smartinvestor : Do you believe that the last leg of the rally led by IT stocks is soon to be over and the sector may witness selling pressure soon?

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