How to trade IT stocks amid Nasdaq fall, rupee levels, Accenture results?

Technical charts suggest that Infosys can potentially rally up to 10% from present levels; while TCS and HCL Technologies still look weak.

The NSE Nifty IT index surged 2.7 per cent to hit a new 52-week high of 35,875 in intra-day deals on Friday led by gains in index heavyweight Infosys and TCS. The former jumped 2.5 per cent, while the latter rallied 1.7 per cent.

Among others, Persistent Systems, CoForge and LTIMindtree soared around 3 per cent each. LTTS, MphasiS and Tech Mahindra advanced over 2 per cent each.

IT stocks are in focus today post announcement of Accenture May quarter (Q3) results on June 20. The company, considered a benchmark for the Indian IT services industry, revised its full-year revenue guidance, narrowing it to a growth range of 1.5 per cent to 2.5 per cent, compared to the previous 1 per cent to 3 per cent.

Accenture’s results continued to reflect pressure on discretionary spending, with growth driven by managed services deals. 
 

Meanwhile, IT stocks, mainly AI-oriented including the likes of Nvidia declined on the Wall Street in trades on Thursday amid profit-taking as shares reached record high levels.

Back home, the Indian Rupee was quoting at its lowest-ever level at 83.60 versus the US dollar. A weaker rupee tends to augur well for the export-oriented IT sector.

Against this background, here's an outlook on key IT shares

Nifty IT index

Current Level: 35,580

Upside Potential: 5.4%

Support: 35,177; 34,550

Resistance: 36,525

The Nifty IT index has crossed its 100-DMA for the first-time since March 21, 2024. The 100-DMA at 35,177 is now likely to act as a support going ahead. Key momentum oscillators on the daily and weekly chart are in favour of further upside.

The Nifty IT index can test 37,500 levels on the higher side, with interim resistance seen at 36,525. In case, the Nifty IT index falls below the 100-DMA, a dip to 34,550 levels seems possible. CLICK HERE FOR THE CHART

Infosys

Current Price: Rs 1,547

Upside Potential: 9.9%

Support: Rs 1,520; Rs 1,485

Resistance: Rs 1,570

With Friday's gap-up Infosys stock has given a strong breakout on the daily chart. The stock is seen firmly trading above its 100-DMA (Daily Moving Average) - a level it earlier struggled along. The 100-DMA stands at Rs 1,520 and is likely to act as an immediate support going ahead. The next major support stands at Rs 1,485 - its 200-DMA. CLICK HERE FOR THE CHART 

Key momentum oscillators on the weekly chart are showing positive crossover, hence the stock is likely to extend the current rally. Near resistance for the stock is seen at Rs 1,570, above which it can potentially rally to Rs 1,700 levels.

TCS

Current Price: Rs 3,865

Downside Risk: 3%

Support: Rs 3,750

Resistance: Rs 3,860; Rs 3,942

At present, the chart structure of TCS stock seems negative, as the stock is seen struggling around its 50-DMA, which stands at Rs 3,860; above which the next key hurdle will be the 100-DMA at Rs 3,942. CLICK HERE FOR THE CHART

Further, the shorter-term moving averages are below the 100-DMA; hence, the sentiment is likely to remain tepid at the counter. On the downside, the 200-DMA at Rs 3,750 is the major support for the stock. For the trend to revive, the stock will need to break and trade consistently above the Rs 3,942 hurdle.

HCL Technologies

Current Price: Rs 1,468

Downside Risk: 5.3%

Support: Rs 1,390

Resistance: Rs 1,485; Rs 1,535

HCL Technologies is seen testing the 100-DMA resistance at Rs 1,485 levels; above which the next resistance stands at Rs 1,535. Breakout and sustained trade above the 100-DMA holds the key for the stock in the near-term. 

In case, the stock fails to overcome the resistance, it can slip back towards its 20-DMA at Rs 1,390-odd levels. CLICK HERE FOR THE CHART