TCS stock can tank 16%, trades below this key monthly support after June 23

TCS is seen testing its 20-month moving average for the first time in 21 months, a monthly close below the same shall open the doors for a slide towards Rs 3,170 levels; suggests technical chart.

TCS stock has shed 8 per cent thus far this February, and the stock is seen trading with a negative bias for the last four straight weeks. Overall, the stock has shed 16.1 per cent from it's all-time high of Rs 3,503 hit in August 2024.  The stock has declined 12.5 per cent post its December quarter results, wherein the IT major reported a 1.7 per cent drop in Q3 revenue on a quarter-on-quarter basis. ICICI Securities on TCS outlook post the December quarter earnings has a 'Hold' rating on the stock.  Meanwhile, the technical chart shows that the stock has been grinding along its lower-end of the Bollinger Bands on the daily and weekly charts owing to persistent selling pressure at the counter this month. The daily chart hints that the near-term bias shall remain tepid as long as the stock trades below Rs 3,830.  More importantly, with today's over 2 per cent intra-day fall to a low of Rs 3,777, the stock for the first time since June 2023 was seen trading below its 20-MMA (Monthly Moving Average), which stands at Rs 3,800. What does this imply for the future outlook on the TCS stock?    Technical chart warns of further over 16 downside risk, if the stock closes below this key monthly moving average. Here are the key levels to watch out for.  TCS  Current Price: Rs 3,792  Upside Potential: 6.8%  Downside Risk: 16.4%  Support: Rs 3,800; 3,727; Rs 3,470; Rs 3,400  Resistance: Rs 3,835; Rs 3,900; Rs 3,970  As explained above, TCS is likely to trade with a negative bias as long as the stock trades below Rs 3,830. On the downside, the stock has near support at Rs 3,727 - in the form of 100-WMA (Weekly Moving Average). A key moving average the stock has respected since July 2023. Break and sustained trade below the same can trigger a fall towards the 200-WMA at Rs 3,470 levels. CLICK HERE FOR THE CHART  Similarly, a monthly close below the 20-MMA at Rs 3,800, shall open the doors for a likely dip towards the trend line support at Rs 3,170. Interim support for the stock can be anticipated around Rs 3,470 and Rs 3,400 levels.  On the positive front, in case, TCS manages a monthly close above Rs 3,800, then the stock can potentially attempt a pullback to Rs 4,050 levels. Interim resistance for the stock can be anticipated around Rs 3,900 and Rs 3,970.