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Tata Consultancy Services (TCS), India’s largest IT software company, will launch the second quarter (September quarter) earnings season on Thursday, October 10. On the same day, another IT company of the Tata group, Tata Elxsi, will also announce its July-September quarterly results.
In the following days, HCL Technologies is expected to report its Q2FY25 results on October 14, followed by MphasiS and LTTS (L&T Technology Services) on October 16; Infosys and Wipro on October 17 and Tech Mahindra on October 19.
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Analysts expect the IT sector to have continued on the path of recovery in the second quarter, as in the previous quarter, rather than sprinting towards growth. According to consensus estimates, the four largest IT companies are likely to report up to 4 percent year-over-year (YoY) growth.
Against this backdrop and the prevailing chart trends, here’s what to expect from major IT stocks going forward.
TCS
Current price: Rs 4,229
Upside potential: 8.8%
Support: Rs 4,195
Resistance: Rs 4,345; Rs 4,375
In the medium term, TCS is likely to test support around its 20-WMA (Weekly Moving Average) at Rs 4,195. As long as this support is maintained, the stock can bounce back to Rs 4,600 levels; with probable intermediate resistance around Rs 4,345 (20-DMA – Daily Moving Average) and the 50-DMA at Rs 4,375.
On the other hand, a breakout and sustained trade below Rs 4,195 can trigger a decline towards Rs 3,955 levels.
Infosys
Current price: Rs 1,935
Upside potential: 8.5%
Support: Rs 1,913; Rs 1,870
Resistance: Rs 1,960; Rs 2,012
Despite the recent market slide, Infosys has managed to hold on and is trading above its major moving averages. Price action relative to moving averages remains favorable across all time frames. Additionally, key momentum oscillators on the daily scale are also favorably placed.
Infosys stock is likely to test Rs 2,012 higher, with some resistance at Rs 1,960. A breakout and sustained trade above the same level may trigger fresh bullish momentum towards levels around Rs 2,100 On the downside, support for the stock is seen at the Rs 1,913 and Rs 1,870 levels.
HCL Technologies
Current price: Rs 1,771
Bias: limited to the beach
Support: Rs 1,740; Rs 1,725
Resistance: Rs 1,820; Rs 1,840
HCL Technologies has been trading in a tight range between Rs 1,720 and Rs 1,820 for over a month now. Bollinger bands on the daily scale suggest a likely range of Rs 1,740 to Rs 1,840.
Tech Mahindra
Current price: Rs 1,619
Bias: limited to the beach
Support: Rs 1,570
Resistance: Rs 1,670
Tech Mahindra has also been trading in a tight range for over a month. The stock needs to break out of the Rs 1,570 to Rs 1,670 range for a new trend to emerge. On the downside, close support for the stock is seen at Rs 1,555; below which the stock may dip to Rs 1,505 and Rs 1,405 levels.
On the upside, above Rs 1,670, the stock can reach Rs 1,760 levels.
Wipro
Current price: Rs 523
Downside risk: 5.2%
Support: Rs 513; 510 rupees
Resistance: Rs 537; 555 rupees
Wipro is today testing support around its 50-DMA in trade at Rs 523. Over the last four trading sessions, the stock has closed consistently below the 20-DMA, suggesting the presence of selling pressure at higher levels.
The stock has close support at Rs 513 and Rs 510; below is the all-important 200-DMA at Rs 496. Key momentum oscillators on the daily and weekly scale are slightly in favor of the bears. Therefore, the stock could see some downward pressure in the near term.
In case of a pullback, the 20-DMA at Rs 537 and the upper end of the Bollinger bands at Rs 555 could serve as resistance levels, the daily chart suggests.
First publication: October 8, 2024 | 12:36 p.m. STI