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4 IT stocks Rajesh Palviya is bullish on for next week

“But looking at the overall structure for the IT index, we believe that if it continues to hold above 36,900, then possible continuity of this uptrend we can see going forward in Nifty IT,” says Rajesh Palviya, Axis Securities.

Let us talk about the IT sector because that has been the only sector that has managed to gain on a weekly basis, up 1% over the course of last week despite a market like this. Now, IT is traditionally a defensive sector, so do you think this is where investor portfolios should be seeking shelter amidst such a volatile market and largecap or midcap IT, which one will be your pick?

We have seen some recovery in most of the largecap IT stocks. Stocks like TCS, HCL Tech, Wipro. These all stocks have shown buying interest but in Friday’s session some profit taking was there.

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But looking at the overall structure for the IT index, we believe that if it continues to hold above 36,900, then possible continuity of this uptrend we can see going forward in Nifty IT.

And possibly once we are able to take out 37,800, then this rally can extend to 38,250 kind of zone. So, here our preferred choice from the IT sector would be from largecap space that is TCS. It is our first choice to buy. As overall structure is bullish and stock is almost treading to it’s all-time high trajectory and even if you look at the weekly structure also stock managed to give break out of last five-week consolidation, so we believe that if TCS continues to hold above 4150 kind of level, then this momentum can extend and we can see further higher level towards 4400 to 4500 kind of level also for TCS.

Even another stock HCL Tech is also looking promising though some profit taking was there at higher level, but still almost the stock is trading and hovering around its all-time high trajectory only and stock is consolidating in a very narrow price range since last three-four weeks.

We believe that once stock crosses above the 1680-1690 kind of zone, then this rally can extend in HCL Tech also and a possible target we can see towards 1800.

So, TCS, HCL Tech as well as Wipro these three stocks one can look to buy from largecap IT side and from midcap IT space we believe that Coforge is another stock where one can look to buy this stock in decline though there a corrective move is taking place in this stock. But I think stock is now trading near its important support area of 6050, which is an important level in this decline. If it holds those levels, I think some pullback action can be seen.

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