👍TCS, Persistent: Breakout in IT index may trigger up to 9% rally in stocks | Business Standard News

Clipped from: https://www.business-standard.com/article/markets/tcs-persistent-breakout-in-it-index-may-trigger-up-to-9-rally-in-stocks-123020300456_1.html

Shares of Tata Consultancy Services, Infosys, HCL Technologies, Coforge and Persistent Systems are indicating chart structures that reflect resumption of their short-to-medium term upmove.

Technology

Information technology (IT) shares are witnessing a robust rally, especially post the Budget 2023, with trading momentum experiencing a follow-up buying sentiment. Shares of Tata Consultancy Services, Infosys, HCL Technologies, Coforge and Persistent Systems are indicating chart structures that reflect resumption of their short-to-medium term upmove.

The Ministry of Electronics and Information Technology has been allocated 16,549 crore in the Budget 2023, enriching technology-led growth.

Meanwhile Wipro, Tech Mahindra and few others in IT pack are yet to give positive confirmations; nevertheless the Nifty IT index is poised for a next breakout.

The IT major has been trading sideways in a broad range since May last year and so far has gained 6.64 per cent in 2023. Shares of Persistent Systems recorded a new 52-week high on Thursday, while HCL Technologies is shy of 25 Points to make a new mark.

On Friday, shares of Tata Consultancy Services and Infosys opened gap-up and gained close to 1 per cent. Persistent Systems was seen trading close to its 52-week high of Rs 4,888.

Here’s the technical outlook of IT stocks, as they began to scale higher grounds:-

NIFTY IT INDEX

Likely target: 34,000 (breakout over 31,227)

Upside potential: 8%

Nifty IT index is resolutely closing over the 50-weekly moving average (WMA), currently placed at 29900-mark, after April last year. If the index succeeds to overcome the barrier of 31,227, which is the previous high, the bullish trend shall see short-to-medium term upside towards 34,000 levels. Immediate support for the index comes to 29,500 levels.

There is a “Golden Cross” formation reflecting a positive up move on the daily chart. This further fortifies the bullish stance for coming sessions. CLICK HERE FOR THE CHART

Persistent Systems Limited (PERSISTENT)

Likely target: Rs 5,200

Upside potential: 7%

Shares of Persistent Systems have strongly surpassed the obstacle range of Rs 4,820 – Rs 4,780, recording a new 52-week. This momentum reveals a bullish bias that aims to rally further to Rs 5,200 levels. A closing basis support for the stock is at Rs 4,700 and Rs 4,500 levels. The current formation of “Higher High, Higher Low” continues to see accumulation on healthy corrections. The stock shall remain in a bullish zone until the major neckline of Rs 4,400 levels is defended. CLICK HERE FOR THE CHART

Tata Consultancy Services Ltd (TCS)

Likely target: Rs 3,800

Upside potential: 9%

TCS shares have succeeded in absorbing all the selling pressure emerged in the range of Rs 3,450 to Rs 3,300 level. This initiates a breakout, which is likely to see higher levels in near-term sessions. With the support of Rs 3,350 levels, which needs to adhere on the closing basis, the counter may easily rally to Rs 3,800 levels. In addition, while there is a price divergence on the Relative Strength Index (RSI), the underlying price action is not letting bears to take control. CLICK HERE FOR THE CHART

Infosys Ltd (INFY)

Likely target: Rs 1,672

Upside potential: 5%

A breakout of “Inverse Head and Shoulder” may propel fresh uptrend in the shares of Infosys. Now the support stands at Rs 1,500 and a positive upside towards the previous high of Rs 1,672 cannot be ruled out.

Medium-term outlook shall shift in bulls favour once the counter sustains over Rs 1,700. Thereafter, a gradual upside could see Infosys shares heading towards Rs 2,100. CLICK HERE FOR THE CHART

Coforge Ltd (COFORGE)

Likely target: Rs 4,800

Upside potential: 9%

Not only have the Coforge shares broken out of the “Double Bottom” breakout, the price action has triggered a bullish rally of “Golden Cross” over Rs 4,270 levels, as per the daily chart. Thus, as long as the Rs 4,200 continues to bolster the uptrend, the rally could reach Rs 4,800 levels, which it failed to cross since March last year. The momentum indictor, Moving Average Convergence Divergence (MACD), has formed a positive cross over right near the zero line, suggesting trend to remain decisive for coming sessions. CLICK HERE FOR THE CHART

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