Infosys, TCS, HCL Tech: Nifty IT up 8% since Oct; time to buy or sell?

Technical charts suggest that the IT index may gain another 5%, with heavyweights Infosys, TCS and HCL Technologies possibly rallying up to 17%. Wipro and Tech Mahindra, however, may see tepid trends.

IT shares have been in limelight for the last one-and-half month with Nifty IT surging up to 8 per cent as against a 5.3 per cent rise in the Nifty 50 index.  Among Nifty IT stocks, Persistent Systems has soared 27 per cent since the start of October till date. HCL Technologies, Coforge and LTIMindtree have rallied 12 - 15 per cent; while TCS, Mphasis, Infosys and Tech Mahindra have gained 3 - 8 per cent in the same period. 

Here's a technical outlook on Nifty IT and key stocks post the recent 8 per cent rally.

Infosys

Current Price: ₹1,498  Likely Target: ₹1,607  Upside Potential: 7.3%  Support: ₹1,492; ₹1,474; ₹1,430  Resistance: ₹1,540; ₹1,565  Infosys stock recently tested the 200-Day Moving Average (200-DMA) after a gap of 10 months. The daily chart shows that the stock is seen trading in a rising channel, which indicates resistance around ₹1,565 and support near ₹1,430. 

 

 

    At present, Infosys is testing 20-DMA support at ₹1,492, with strong support visible at ₹1,474. On the upside, breakout above the 200-DMA at ₹1,540 can trigger a rally towards ₹1,607. 

Nifty IT

Current Level: 36,190  Likely Target: 38,100  Upside Potential: 5.3%  Support: 36,000; 35,800; 35,323  Resistance: 36,961; 37,150; 37650  Despite the 8 per cent rally, the price-to-moving averages action remains neutral for the IT index, as the benchmark holds above short-term moving averages, but below long-term averages. 

 

    Having said that, the short-term trend is likely to be cautiously optimistic above 35,323 with intermediate support at 36,000 and 35,800. Breakout above the 200-DMA at 36,961 can help the index gain strength. On the upside, the IT index may rally to 38,100, with interim resistance likely around 37,150 and 37,650. 

Tata Consultancy Services (TCS)

Current Price: ₹3,090  Likely Target: ₹3,310  Upside Potential: 7.1%  Support: ₹3,050; ₹2,975  Resistance: ₹3,100; ₹3,190; ₹3,240  TCS share is likely to trade with a cautiously positive note above ₹2,975, with near support at ₹3,050. The stock is seen testing 100-DMA resistance at ₹3,100; above which it can spurt towards its 200-DMA at ₹3,310, with interim resistance likely around ₹3,190 and ₹3,240. 

 

 

HCL Technologies

Current Price: ₹1,591  Likely Target: ₹1,860  Upside Potential: 16.9%  Support: ₹1,526; ₹1,517  Resistance: ₹1,630; ₹1,700  HCL Technologies stock is seen trading above its 200-DMA for the last five trading sessions. The stock is likely to target ₹1,860 on the upside, with interim resistance around ₹1,630 and 1,700. The 200-DMA at ₹1,536 and trend line support at ₹1,517 likely to act as key supports. 

 

 

Wipro

Current Price: ₹244  Likely Target: ₹226  Downside Risk: 7.4%  Support: ₹236; ₹233  Resistance: ₹247; ₹248; ₹254  The near-term bias for Wipro stock is likely to remain tepid as long as the stock trades below ₹247 - ₹248 resistance zone. Above which, the 200-DMA at ₹253 will be the key hurdle. The stock is trading in a tight range, with near support around ₹236 - ₹233; below which it can dip towards the 200-Week Moving Average (200-WMA) at ₹226. 

 

 

Tech Mahindra

Current Price: ₹1,448  Likely Target: ₹1,360  Downside Risk: 6.1%  Support: ₹1,425; ₹1,390  Resistance: ₹1,457; ₹1,489; ₹1,499  Tech Mahindra share is seen trading near its short-term hurdle at ₹1,457; above which the 100-DMA and 200-DMA at ₹1,489 and ₹1,499 are likely to act as key hurdles. On the other hand, the stock is attempting to form a support base around the 100-WMA at ₹1,425. In case of weakness, the stock may fall to ₹1,360, with interim support likely at ₹1,390.