Nifty faces hurdle at 15,000 mark, IT stocks likely to outperform

Technical analysts are bullish on the IT sector ahead of March quarter earnings season. The BSE IT index has hit a record high last week with IT majors Infosys and TCS also hitting their peaks. Meanwhile, technical experts feel Nifty has to cross the immediate hurdle of 15,000 to go higher to the next resistance of 15,300. A break below 14,650 can take the index to its March lows of 14,264.40.

RAHUL SHARMA
HEAD, TECHNICAL AND DERIVATIVES RESEARCH, JM FINANCIAL SERVICES

Where is the index headed?
Technically, supports are seen at 14,800 and 14,650 while 15,000 continues to be a crucial psychological resistance. On the derivatives front, fresh shorts were seen in Nifty Futures on Friday. 14,800 Puts and 15,000 Calls have meaningful positions which can act as key breakout/breakdown points for the market going into this week. Nifty can expect fresh weakness if we break 14,650, and in that case the March lows can be tested.

What should investors do?
We advise investors to hedge their portfolios by buying 14,500 Puts of April monthly expiry. Long setups are seen in pharma and IT while metals can be bought on dips.

Your outlook on IT stocks ahead of March quarter earnings…
Nifty IT index has hit life highs ahead of the Q4 earnings and is expected to continue the upward momentum. This was also helped by a weakening rupee and expectations of good results. We are bullish on Infosys, HCL Tech and TCS and these can be traded on the long side with a stop-loss of 3 per cent from Friday’s closing. L&T Infotech looks attractive for targets of Rs 4,600 to Rs 4,800 and stop loss of Rs 4,200.

NAGARAJ SHETTI
SENIOR TECHNICAL RESEARCH ANALYST, HDFC SECURITIES

Where is the index headed?
Nifty is in a broader range of 14,300- 15,300 over the last couple of months. The lower area of 14,200-14,000 could offer a strong base. The present chart setup indicates upside breakout of the hurdle of 14,900 and a decisive up-move above this area is likely to pull Nifty towards the high of 15,300-15,500 levels in the next one month.

What should investors do?
Investors may continue their trading/ investment long positions and better to have stop loss trailing in the profitable positions. One may also create fresh long trading positions in selective large-cap and mid-cap stocks. Since, there is no indication of any significant reversal pattern at the highs and no need to worry about any sharp reversal as of now.

Your outlook on IT stocks …
The NSE IT sector has been in a continuous uptrend over the last few sessions and is currently making an attempt of decisive upside breakout of broader narrow range of around 25,100- 26,900 levels. We expect another 7-8 per cent upside in the IT sector, which could mean 10-15 per cent upside potential for some of the IT stocks around Q4 earning season.

DHARMESH SHAH
HEAD-TECHNICALS, ICICI SECURITIES

Where are indices headed?
The Nifty is expected to extend its ongoing consolidation in the broad range of 14,500- 15,000 amid stock specific action. Midcaps and smallcaps are expected to relatively outperform. A key observation within this consolidation has been Nifty holding out its rhythm of not correcting more than 9 per cent since March 2020 despite negative news ow of lockdowns. Considering the worst case scenario, we do not expect Nifty to breach its strong support zone around 13,800-13,900.

What should investors do?
Investors should not panic amid volatility and rather adopt a strategy of utilising declines to accumulate quality large- and midcap stocks. We expect outperformance of IT, pharma, and consumption sectors to extend on relative terms.

Your outlook on IT stocks ahead of March quarter earnings…
We have been positive on IT index and expect the structural uptrend in this sector to lead to outperformance. Recent weakness in the rupee can act as an additional tailwind to the sector. We remain constructive on TCS, Info Edge, L&T Infotech and Matrimony amongst others.