Relief rally in telcos to continue; tech charts signal 25% upside in Vi

The BSE telecom index has touched a new all-time high on Thursday, suggesting positive sentiment over the next few sessions

The telecom stocks buzzed in today's session after the Union Cabinet on Wednesday announced key telecom reforms, including moratorium of telecom dues both adjusted gross revenue (AGR) and Spectrum for 4 years. 

While most brokerages have given a thumbs up to the development and suggest the provisions give some breathing space to Vodafone Idea (VI) – at least for four years – Bharti and Reliance Jio, too, stand to gain in case VI is unable to retain customers, improve connectivity and invest in ramping up the 5G network infrastructure in the long run. READ HERE

On Thursday, the BSE Telecom index touched a new high while Vodafone Idea rallies 15 per cent. Shares of Airtel, on the other hand, traded flat. 

What's in store for the telecom stocks going ahead? Here's what tech charts say:

BSE Telecom Index

Likely target: 2000

Upside potential: 7%

The BSE telecom index touched a new all-time high on Thursday, suggesting a positive sentiment over the coming sessions. This up move is exhibiting a “Higher High, Higher low” formation with immediate support at 1,620 levels and a possible rally towards 2,000 levels, as per the weekly and daily charts. CLICK HERE FOR THE CHART

Bharti Airtel Ltd (BHARTIARTL)

Likely target:  Rs 800

Upside potential: 11% to 17%

The stock conquered a significant resistance range of Rs 650- Rs 620 levels to break out on the upside. Monthly charts suggest that with this breakout, the stock can head towards Rs 800 and Rs 850 levels. The immediate support falls at Rs 700 and Rs 680. Furthermore,  the Relative Strength Index (RSI) trades in the overbought category, without any signs of weakness, reflecting a positive momentum. CLICK HERE FOR THE CHART

Vodafone Idea Ltd (IDEA)

Likely target: Rs 12 and Rs 14

Upside potential: 25%

The shares of Vodafone India have crossed the 200-days moving average (DMA), placed at Rs 9.50 levels, with a firm gap-up start today. This up move is also supported by the Moving Average Convergence Divergence (MACD), which has crossed above the zero line. One more positive close above the 200-DMA may take this counter towards Rs 12 and Rs 14 levels, as per the daily chart. The support stays on the closing basis at 200-DMA. CLICK HERE FOR THE CHART

Mahanagar Telephone Nigam Ltd (MTNL)

Likely target:  Rs 24 and Rs 26 (after crossing Rs 21)

Upside potential: 14% to 22%

MTNL shares face resistance at Rs 21 level. If the stock takes out this resistance, then only it can head towards Rs 24 and Rs 26 levels. The support stays at Rs 17, which is its 200-DMA. The volumes have remained sideways reflecting lower interest of market participants. CLICK HERE FOR THE CHART