Analyzing India

TCS: Likely Shift of Action to IT Pack May See This Stock Relatively Outperform


The IT Pack remains firmly placed in the leading quadrant of the Relative Rotation Graph (RRG) as bench-marked against the broader CNX500 index. However, the IT index has relatively under-performed the front-line NIFTY over the past couple of days. With the NIFTY likely to take a breather and consolidate over the coming days, there is a possibility that we could see some IT stocks relatively out-performing the NIFTY. TCS is one such stock.

Tata Consultancy Services Ltd (TCS.IN)

TCS peaked near 2266 in late September 2018 and has since remained in a broad trading range. The price action over the past couple of days has resulted in the formation of a Symmetrical Triangle. If supported by other pieces of evidence, this pattern would act as a continuation pattern.

The daily and weekly MACD remain in continuing buy mode. On the higher timeframe charts, the OBV (On Balance Volume) has shown a sharp up move, which is a bullish sign. The RS Line remains in a firm uptrend on the higher timeframe charts.

If the present pattern results in an up move, the stock can return ~11% from the present price level of 2022. Any price action below 1940 will be negative for the stock.

Milan Vaishnav, CMT, MSTA
Consulting Technical Analyst

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

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Milan Vaishnav
About the author: , CMT, MSTA is a qualified Independent Technical Research Analyst at his Research Firm, Gemstone Equity Research & Advisory Services in Vadodara, India. As a Consulting Technical Research Analyst and with his experience in the Indian Capital Markets of over 15 years, he has been delivering premium India-focused Independent Technical Research to the Clients. He presently contributes on a daily basis to ET Markets and The Economic Times of India. He also authors one of the India's most accurate "Daily / Weekly Market Outlook" -- A Daily / Weekly Newsletter,  currently in its 15th year of publication. Milan's primary responsibilities include consulting in Portfolio/Funds Management and Advisory Services. His work also involves advising these Clients with dynamic Investment and Trading Strategies across multiple asset-classes while keeping their activities aligned with the given mandate. Learn More
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