Chart check: Should you stay invested in TCS, Wipro at the current levels?

The medium-term outlook for TCS and Wipro looks extremely bullish. Here are the key levels you need to keep a tab on

Shares of Tata Consultancy and Wipro gained ground on Thursday. While TCS hit a fresh high on better-than-expected financial performance for the July - September 2020 quarter (Q2FY21) and the proposed buyback of shares amount to Rs 16,000 crore at Rs 3,000 apiece, Wipro surged 5 per cent at Rs 353, hitting a fresh over 20-year high on the BSE after the company said the board will consider a buyback proposal on Tuesday, October 13.

"We are increasing the target multiple for a fourth time in five months, now to 40x (from 30x) as we strongly believe that the best way to capture an upcycle is to jack up the multiples upfront while earnings would follow. We expect CAGRs of 15% in revenue and 22% in earnings over FY23–27E. Maintain ‘BUY’," wrote Sandip Agarwal, an analyst trading the company at Edelweiss Securities in an October 7 co-authored note with Pranav Kshatriya.

Here's how these two IT majors look on the technical charts.

Tata Consultancy Services Limited (TCS): With a sharp upside of over 13 per cent in the current week, the medium-term outlook has turned highly bullish. Going forward, till the counter defends the support of Rs 2,200, the medium-term outlook looks promising and can take the stock towards the Rs 4,000 mark. The immediate support comes in at Rs 2,550 and then Rs 2,400 levels. The stock has entered the overbought territory of the Relative Strength Index (RSI), which can see profit booking for a short duration. However, the momentum is highly positive and minor corrections are likely to see buying and accumulation, as per the weekly chart. CLICK HERE FOR THE CHART
 
Wipro Ltd (WIPRO): The recent surge above the resistance of Rs 325 has resulted in a big breakout that shows immediate target levels to be at Rs 370 and Rs 390. The counter is not showing any weakness despite being in the overbought condition of RSI. This reflects the underlying strength and the stock should move up in the days ahead. The overall trend stays highly bullish from a medium-term perspective. CLICK HERE FOR THE CHART