[Premium] Trade Of The Week

Over the weekend we wrote about the breakout in TCS and strength in the Nifty IT sector. We think this theme is here to stay, so we want to be buying names with well-defined risk.

Here's Persistent Systems flagging at all-time highs. Two potential negatives are the bearish momentum divergence and that prices are extended from their 200-day moving average, but our risk is extremely well-defined and the reward/risk is skewed in our favor. If this IT strength is going to continue, this name should be helping lead to the upside.

Click on chart to enlarge view.

As long as prices of Persistent Systems are above the recent pivot low and 2015 highs near 950, we want to be long with a target near 1,290.

Otherwise, if prices break below 950 then there's likely further downside towards 875 and will signal to us that IT stocks in general need more time before continuing their upward trend.

For all of the stocks we want to be buying and selling, make sure to review our Trade Ideas page.

Make sure to check out our other weekly post, "Three Charts For The Week Ahead." Additionally, over the weekend we published an updated view on Reliance and some perspective on the breakout in TCS.

And if you haven't registered for this Tuesday's Conference Call, be sure to do so. We'll be discussing good data points, bad data points, and making sense of them all to figure out how to profit in the current environment.

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team