Infosys can slip below Rs 1,000 levels; TCS can hit Rs 2,900, charts show

Nifty IT index may fall up to 3 per cent post hitting a new 52-week low, trend turns bearish.

Nifty IT index hit a new 52-week low on Monday post Infosys and Tata Consultancy Services delivered lower-than-expected quarterly earnings, missing street estimates.  The index plunged over 6 per cent in the early trades, with Infosys locking in 10 per cent lower circuit and Tata Consultancy Services tumbling 4 per cent.

All of the constituents in Nifty IT index tumbled over 3 per cent, with LTIMindtree and Persistent Systems losing the most by plummeting nearly 10 per cent. 

Shares of Mphasis and Wipro also slipped to fresh 52-week lows on Monday. 

Thus, will this Q4FY23 results push IT stocks in bearish hands? To understand this, lets consider the technical outlook:-

NIFTY IT INDEX

Likely target: 26,000

Downside potential: 3%

A new 52-week low has triggered a fresh downside in the index that may see counter gradually heading towards 26,000 levels. The immediate closing basis barrier exists at 27,500, and until this mark is not taken out, the positive bias may not restore the losing momentum. 

The trend has turned bearish and if the index fails to display recovery, the medium-term outlook may enter a bearish grip.  CLICK HERE FOR THE CHART

Infosys Ltd (INFY)

Likely target: Below Rs 1,000

Downside potential: 17%

On a broad perspective, the IT major was in a rectangular consolidation in the range of Rs 1,700 to Rs 1,300 levels. Now, as the lower support is breached, with a massive gap-down, the sentiment towards the stock turns negative. 

There is a “Death Cross”on the daily chart, suggesting weakness to persist for coming sessions. The counter needs to hold the sell-off close to Rs 1,234 level, its 200-weekly moving average (WMA), otherwise the medium-term trend may enter the bearish mode and push stock sub Rs 1,000 levels. CLICK HERE FOR THE CHART

Tata Consultancy Services Ltd (TCS)

Likely target: Rs 2,900

Downside potential: 6%

The formation of “Head and Shoulder” pattern shows a negative bias, if the stock fails to sustain over Rs 3,100 mark. A breach of this support may drag counter towards Rs 2,900 levels, which was the recent reversal mark. 

On the higher side, the hurdle is placed at Rs 3,300 levels. The current sentiment points to a weakness that may put pressure on the counter to breach lower support.  CLICK HERE FOR THE CHART

Wipro Ltd (WIPRO)

Likely target: Rs 320

Downside potential: 10%

The bigger trend for the shares of Wipro remains bearish, as key moving averages and widely used technical indicators continue to flash sell bias. The stock has reached a new 52-week low today, infusing more weakness. 

To recoup the positive bias, the stock needs to trigger Moving Average Convergence Divergence (MACD) over the zero line, with stock price overcoming the 200-day moving average (DMA) hurdle. As of now, the weakness may lead stock to Rs 320 levels. CLICK HERE FOR THE CHART