Nifty IT index reclaims 200-DMA; what does this mean for IT stocks?

Nifty IT index surpassed the 200-day moving average (DMA) for the third time this year, fuelling positive rally in IT stocks. Especially in Wipro and LTIMindtree, where the former crossed the 200-DMA first time, post January 2022 and the latter set a new current year high. 

On Tuesday, Barring Coforge and Persistent Systems, all other IT stocks were seen trading in green, maintaining their upward course. 

While the IT index had a tough phase last year, where it tumbled 26 per cent, continued efforts to cross the 200-DMA could provide some respite in the current drawdown. 

So far this year, Persistent Systems is the top contender surging close to 30 per cent, while Infosys remains as the top loser, plunging 14 per cent. 

Here’s the technical outlook of IT stocks amid index claiming the 200-DMA:-

NIFTY IT INDEX

Likely target: 30,100

Upside potential: 4%

The IT index has not only negated the “Death Cross” formation emerged recently, but has conclusively conquered the 200-day moving average (DMA), set at 28,871, as per the daily chart. This implies a potential upside towards 30,100 levels. 

The ongoing trend remains strong over the 200-DMA, and until the index holds the support of 28,000 to R27,500 range, the positive bias is expected to see addition of longs. The broader trend may even stretch to 31,200 to 31,800 range. CLICK HERE FOR THE CHART

Wipro Ltd (WIPRO)

Likely target: Rs 440 

Upside potential: 11%

Shares of Wipro have leaped over the 200-DMA after January 2022, with resilient volumes implying further upside in the coming sessions. The stock has succeeded in recouping the bullish trend over Rs 395-mark, its 200-DMA. The breakout over this hurdle could see it gradually heading in the direction of Rs 440 levels.  The support of Rs 380 remains as the trend reversal mark. CLICK HERE FOR THE CHART

Tata Consultancy Services Ltd (TCS)

Likely target: Rs 3,600

Upside potential: 10%

While the stock has a breakout of “Double Bottom”, a sustained rally over Rs 3,300 level might garner an upside to Rs 3,600 levels. The current move over the 200-day moving average (DMA), set at Rs 3,240 has further accelerated the bullish bias and assisted in regaining the positive strength. 

The support exists in the range of Rs 3,250 to Rs 3,200 levels, as per the daily chart. Only a breakdown beneath Rs 3,200 could alter the upward bias, and derail the bullishness of the larger chart pattern. CLICK HERE FOR THE CHART

Coforge Ltd (COFORGE)

Likely target: Rs 4,700

Upside potential: 8%

At the current chart formation, which resembles “Higher High, Higher Low”, pattern, the stock is well poised to cross the previous high of Rs 4,487.25, which is also the 52-week high. A gradual upside in this direction cannot be ruled out, as per the weekly chart as well. The stock may potentially hit Rs 4,700 levels.

The support for the stock appears at Rs 4,200 and Rs 4,050 levels. The trend seems robust, with positive willingness to rally further. CLICK HERE FOR THE CHART

LTIMindtree Ltd (LTIM)

Likely target: Rs 5,264

Upside potential: 6%

Shares of LTIMindtree have set a new high of this year, after crossing previous reading of February. This momentum appears vigorous and headed in the direction of its hurdle of Rs 5,263 level.

Fresh upside is likely over this mark, which may turn the sentiment into a resilient bullishness. The support for the stock falls at Rs 4,700 that needs to be considered on the closing basis. Crossing of the hurdle could means bullish upside towards Rs 5,500 levels, as per the daily chart. CLICK HERE FOR THE CHART