IT('s) the Strongest

January 1, 2022

The market had been a mess for most of 2021. But even as the weakness persisted at the end of the year, we repeatedly highlighted the strength coming through in the IT space.

Well, this post is no different. We have breakouts, people! Let's take a look!

Below is the IT index with the important levels that we'd like to track.

Nifty IT has been sticking its head out every time we've looked for bullish momentum and strength in the market. And that strength is evident from the chart below when you look at the bottom pane of the chart. The relative strength pops right off the page. We can also see that the average drawdown has been a low 15% while most sectors have it way worse with no show of strength whatsoever.

What's our pick from the sectors even now?

IT.

Click on the chart to zoom in.

Keeping that in mind, here are a set of good setups that came through this week. This is as good a time as any to invest in these stocks, if you haven't already!

First up, let's take a look at the big names that often drive the market higher.

Infosys has been coming up in our scans and conference calls for some time now, and has obviously made its way here too!

The price has moved past its resistance at 1,790 and looks good for the next leg of the rally. After a minor consolidation, the price action has resumed in the direction of the underlying trend.

The indicator too is in a bullish regime, adding weight to the positive thesis.

We are bullish above the level of 1,790 with a target near 2,580.

Next up, we're looking at HCL Tech. The price has just about made its way above the resistance level of 1,295 in the week gone by. The indicator is in strong bullish territory.

We are positive above the risk management level of 1,295 with a target close to 2,080.

Wipro is halfway through its target. We can see the price marching on towards its target of 850 as the momentum catches on.

Tech Mahindra is featured in our latest scan, which you can check out right here.

LTI has been quite a leader among the IT stocks and doesn't seem to want to give that title away! The price is bouncing back from a crucial level and looks good for a move towards its next target of 9,825. The risk management level to follow would be 6,535.

LTTS is another very good example of consistent strength. After consolidating for a little while, the price looks like it's headed towards the target of 6,890. The risk management level to follow would be 5,000.

Persistent Systems is one of the most beautiful technical charts one could see. There are clear levels of support and resistance and the move is just so clean! We are bullish above the level of 4,300 with a target close to 5,900.

Mphasis is another stock that has held its ground really well. The price had been consolidating below its Fibonacci retracement but refused to move away from the level. Now we have a breakout with the price moving past 3,350.

We are bullish above 3,350 with a target close to 5,025.

Coforge is another name that has bounced back from an important level. We are bullish above the level of 5,170 with a target near 8,140.

Birla Soft has made its way above the crucial level of 465. We are positive above this level with a target near 725.

Up next we're looking at Sonata Software making its way above the resistance level of 883. With this move, we are bullish with a target near 1,340.

Eclerx has been moving sideways for a little while. But this week, we got a breakout! The price moved past the resistance of 2,490. We are bullish above this level with a target near 3,830.

Zensar Technologies has finally made a move following its base breakout. We are bullish only as long as the price trades above the risk management level of 510, with a target near 785.