Charts show Nifty IT index has bottomed out: 4 stocks can rally up to 24%

MindTree, Mphasis and Larsen & Toubro Infotech may rally up to 24 per cent, while Infosys needs to overcome its near-term hurdle for fresh gains.

All Nifty IT index stocks traded with a positive bias in early deals on Thursday, as the benchmark indices, the BSE Sensex and Nifty 50 attempted to extend their winning run into the seventh straight day. 

The Sensex and the NSE Nifty 50 have gained 15 per cent each so far from their recent 52-week lows, and seem headed towards 59,000 and 17,500 levels, respectively.
 

Among the IT pack, MindTree and Mphasis were the top movers surging close to 3 per cent each. Larsen & Toubro Infotech  and Infosys also advanced 2 per cent each, while L&T Technology Services, Wipro and Coforge gained a per cent apiece. 

NIFTY IT INDEX

Likely target: 33,550

Upside potential:  12%

Post breaking out of the “Inverse Head and Shoulder”, pattern on the daily chart and simultaneously with a “Double Bottom” on the weekly, the bullish prospects has strengthened vigorously for the IT sector. The index has set aside its 100-weekly moving average (WMA) barrier placed at Rs 29,451 and is hinting for a rally towards 33,550-mark, which is its 50-WMA, in the medium-term.  CLICK HERE FOR THE CHART

MindTree Ltd (MINDTREE)

Likely target: Rs 3,813 and Rs 4,400

Upside potential:  8% to 24%

This is one of the few notable stock to have held the ground above the 100-WMA, even as the Nifty IT index failed to do so in the recent rout. While MindTree trades 30 per cent lower from its historic peak registered in November 2021, the price action near 100-WMA and the present overwhelming pullback points at a sharp upside, signalling that a bottom has been made. The immediate hurdle for the stock comes at Rs 3,813, its 50-DMA and thereafter at Rs 4,400 levels.  The closing basis support for the stock stays at Rs 3,250-mark. CLICK HERE FOR THE CHART

Mphasis Ltd (MPHASIS)

Likely target: Rs 2,600 and Rs 2,800

Upside potential:  9% to 17%

After testing mild support near Rs 2,100-mark twice in recent times, the stock has moved into a sideways pattern. This momentum is now pushing the stock higher with an intent to breakout towards the Rs 2,350 hurdle. The up move is aggressive and breakout seems on the verge, as the Moving Average Convergence Divergence (MACD) has climbed above the zero line, suggesting positive underlying momentum. The stock seems headed to Rs 2,600 and Rs 2,800, according to the daily chart. Support cushion for the stock is placed at Rs 2,250-mark. CLICK HERE FOR THE CHART

Larsen & Toubro Infotech Ltd (LTI)

Likely target: Rs 5,547 

Upside potential:  14%

Shares of Larsen & Toubro Infotech have conquered the 50-day moving average (DMA) and 100-DMA hurdles with firm price action. This highlights the underlying robust strength. Thus, as long as the stock defends the support at Rs 4,600-mark, which is little under 100-DMA level of Rs 4,644, the trend may continue to rally forward and reach to Rs 5,547, its 200-DMA. CLICK HERE FOR THE CHART

Infosys Ltd (INFY)

Outlook: Requires overthrowing Rs 1,550

The stock is trying to break through the resistance of Rs 1,555-mark, shows the daily chart. Only successive close over the obstacle could see further upside. As and when this happens, the price action might see the rally headed towards Rs 1,700 level, which was the major gap-down mark. So far, Rs 1,500 stays as a cushion for the positive sentiment.  CLICK HERE FOR THE CHART