• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock This IT Bellwether May Wake Up From a Slumber
Stock

This IT Bellwether May Wake Up From a Slumber

by January 16, 2023
by January 16, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Over the past couple of weeks, the performance of the IT stocks has remained quite muted; the NIFTY IT Index has come off from its November highs and has consolidated over some time. This has led to relative underperformance of the IT group against the broader markets. However, a few signs have emerged on the chart showing this IT bellwether preparing for some upward price revision over the coming days.

Tata Consultancy Services (TCS.IN)

For most of 2022, TCS has underperformed the broader markets. It was only in October last year that the stock formed double-bottom support in the 2950–3000 zone and started to inch higher. The pattern analysis of the daily chart shows that between June 2022 and now, the stock has largely remained in a broad but well-defined trading range between 2950–3000 levels.

Following the up move that happened after the stock found double-bottom support near 3000 in October, the price tested the previous resistance near 3400 levels. After a failed attempt to break above this point, price retraced, but ended up forming a significantly higher bottom on the chart.

Over the past three to four weeks, the stock has consolidated in a narrow range; consequently, the Bollinger Bands® narrowed indicating a period of low volatility in the stock. The recent price action shows a strong attempt by the stock to move higher. The price closed above the upper Bollinger Band indicating a likely resumption of a meaningful up move. Even if the prices temporarily pull themselves back inside the band, a fresh initiation of an up move cannot be ruled out.

While the stock consolidated in a narrow range, it witnessed a golden cross as the 50-day moving average (MA) crossed above the 200-day MA. The stock presently resides in the leading quadrant of the RRG when benchmarked against the broader NIFTY500 Index.

Importantly, the stock enjoys rising relative strength against the broader NIFTY500 Index. The RS line is rising above the 50-period MA. If you compare the stock against its peer Infosys Ltd. (INFY.IN), TCS comes out as a better choice. The RS line of TCS against INFY is also in a strong uptrend and above the 50-period MA.

While the moving average convergence/divergence (MACD) stays in continuing buy mode, percentage price oscillator (PPO) stays positive. The relative strength index (RSI) has marked a fresh 14-period high which is bullish; it stays neutral and doesn’t show any divergence against the price.

If the upward revision of price takes place on the expected lines, then the stock has the potential to test 3480–3500 levels. This translates into a price appreciation of ~4% from the current levels. Any close below 3170 will negate this technical setup.

Foram Chheda, CMT

and

Milan Vaishnav, CMT, MSTA | Consulting Technical Analyst | www.EquityResearch.asia | www.ChartWizard.ae

Disclosure pursuant to Clause 19 of SEBI (Research Analysts) Regulations 2014: The analyst, Family Members, or his Associates holds no financial interest below 1% or higher than 1% and has not received any compensation from the Companies discussed.

The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions, and the needs of specific recipients. This may not be taken in substitution for the exercise of independent judgment by any recipient.

The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates, or any other reason. Past performance is not necessarily a guide to future performance. The usage of the Research Reports and other Services are governed as per the Terms of Service at https://equityresearch.asia/terms-of-use

The Research Analyst has not managed or co-managed the issues of any of the companies discussed and has not received any such remuneration from such activities from the companies discussed.

The Research Analyst has not received any remuneration from the Merchant Banking activities.

The Research Analyst has adopted an independent approach without any conflict from anyone. The Research Analyst has not received any compensation or other benefits from the companies mentioned in the report or third parties in connection with the preparation of the research report.

Compensation of the Research Analysts is not based on any specific merchant banking, investment banking, or brokerage service transactions.

The Research Analyst is not engaged in a market-making activity for the companies mentioned in the report.

The Research Analyst submits that no material disciplinary action has been taken on him by any Regulatory Authority impacting Equity Research Analysis activities.

This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country, or other jurisdiction, where such distribution, publication, availability, or use would be contrary to law, regulation or which would subject the Research Analyst to any registration or licensing requirement within such jurisdiction.

You Might Also Like
  • CSCO Stock: A Hidden Gem With Upside Potential
  • Swenlin Trading Oscillators Trying To Turn Up
  • VIX Index Above All of Its Futures
  • Dell’s Bullish Climb: Should You Get In Now?
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Options Strategies for Small Accounts
next post
Week Ahead: Expect Markets To Trade With Positive Bias So Long As These Levels Are Defended; These Sectors To Do Well

You may also like

5 Must-Know Interactive Features to Supercharge Your Charting

May 20, 2023

What’s Wrong With This SPX Breakout?

October 9, 2024

Bullish or Bearish? The Truth About Rate Cuts and Stock...

September 21, 2024

Dow Theory Flashes Bear Signal

May 24, 2024

Breadth is Not Keeping Pace with the Bounce

September 12, 2023

Trading Against the Crowd with the Williams Sentiment Index

September 1, 2023

Zweig Breadth Thrust Dominates the Headlines – But What about...

April 26, 2025

Watch Stocks Triumph In Latest Asset Allocation Battle

January 19, 2024

Be On the Lookout for THIS During Earnings Season!

October 18, 2024

Low Vol To High Beta Stock Rotation Is Surging

July 14, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Market Signals Align – Is a Bigger Move Ahead?

      July 2, 2025
    • MACD Crossovers: Why Most Traders Get It Wrong

      July 2, 2025
    • Should You Buy Roblox Stock Now? Key Levels to Watch

      July 2, 2025
    • As his feud with Trump reignites, Musk’s business with the government is back in the crosshairs

      July 2, 2025
    • Apple sues former Vision Pro employee for allegedly stealing ‘thousands of documents’ before joining Snap

      July 2, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,626 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,910 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,600 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,562 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,440 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,160)
    • Investing (538)
    • Stock (2,649)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Market Signals Align – Is a Bigger Move Ahead?

      July 2, 2025
    • MACD Crossovers: Why Most Traders Get It Wrong

      July 2, 2025
    • Should You Buy Roblox Stock Now? Key Levels to Watch

      July 2, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,160)
    • Investing (538)
    • Stock (2,649)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Further Inversion of Yield Curve Pushes...

    July 26, 2023

    Leaders Lost & Laggards Won

    April 25, 2023

    S&P 500 Earnings Results Are In...

    July 2, 2024
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here