IT sector outlook near term update

We recommended to exit long positions in IT stocks on 19th of March 2013. The major stocks HCL Tech, Infosys have performed as predicted by us. The amid volatility has risen in markets from past 2 - 3 weeks which has created a good opportunity for good trades.

                                                            CNXIT daily Chart

The bears are in control of the market at present. The CNXIT index has shown a descending triangle formation with lower tops formation can be seen. The volatility is expected to rise in the sector in coming week due to Infosys quarterly results on 12th April 2013 (coming Friday). So traders who would like to initiate fresh positions are advised to be cautious as volatility can be increased and whipsaws can occur.

Infosys failed to cross previous highs showing bearish signs and signs of distribution before results due to nervousness from investors is seen. Similar kind of double top formations seen on daily charts of HCL tech and Infosys. Infosys results holds the key fundamentally for the index turn around. The long traders are advised to trade on cross above 3020 levels and short traders should be careful and watch 2900 as key resistance zone for coming week technically.

                                                              Infosys Daily Chart

                                                         HCL Tech Daily Chart

                                                                                                                      

                                                                    
                                                           TCS Daily Chart

Key resistance and support zones to watch out for:

CNXIT

Support     - 6700/6400/6250
Resistance - 7130/7240/7400

Infosys

Support      - 2830/2750/2700 below free fall zone
Resistance  - 2900/3000

TCS


Support      - 1500/1448/1390
Resistance  - 1545/1570/1598



HCL Tech


Support      - 735/700
Resistance  - 770/784

These are updated charts along with the key support and resistance levels for Infosys, TCS and HCL Technologies along with CNX IT Index. For further information one can look at our previous blog section on 19/3/2013 and details individual analysis on TCS in our past blog.

Raju V Angadi

 Equity Research Analyst

 To know more about probable counts contact us back on rvangadi@googlemail.com

Disclaimer: This is just an view based on the research of individual. So kindly trade along with the consultation of your financial adviser, market trends, price action and own risk appetite considered while investing or trading in stock markets.