IT stocks have shown a strong rebound recently, with the NIFTY IT index jumping over 10% in just four trading sessions. This surge comes after the sector fell more than 30% from its record highs, placing IT stocks back in the spotlight amid a generally weak broader market. Investors are optimistic following encouraging quarterly earnings reports for Q2FY27, which helped drive this renewed interest.
- The NIFTY IT index surged over 5.5% this week, marking one of its best performances in over a year.
- Tata Consultancy Services (TCS) shares rose more than 15% in ten sessions and are trading above their 20 and 50-day exponential moving averages (EMA).
- Infosys shares jumped over 10% in ten sessions, crossing key moving averages and showing strong bullish momentum.
- HCL Technologies and Tech Mahindra crossed their 200-day EMA, indicating a shift from bearish to bullish trends.
- Wipro shares also rallied over 7%, trading above short-term moving averages despite being excluded from the NIFTY IT index.
Why Are IT Stocks Bouncing Back?
The IT sector had been under pressure, with stocks falling over 30% from their record highs. However, recent quarterly earnings reports have boosted investor confidence. The NIFTY IT index, which tracks the performance of major IT companies, surged over 5.5% this week, driven by strong rallies in heavyweight stocks like TCS, HCL Technologies, Infosys, and Tech Mahindra.
How Are Key IT Stocks Performing Technically?
Tata Consultancy Services (TCS) shares have bounced back strongly, rising more than 15% in ten trading sessions. The stock is trading above its 20 and 50-day EMAs, which suggests positive momentum. However, it still needs to cross its 200-day EMA level of ₹2,459 to confirm a long-term uptrend.
Infosys shares have increased over 10% in ten sessions and formed a double bottom pattern near ₹979. The stock has crossed its 20 and 50-day EMAs, signaling a potential positive crossover. The relative strength index (RSI) of 58 indicates strong bullish strength, but the 200-day EMA at ₹1,208 remains a key resistance level.
HCL Technologies has outperformed many peers, maintaining gains from July lows. It recently crossed its 200-day EMA, indicating a shift from bearish to bullish momentum on long-term charts.
Tech Mahindra shares rose over 9% in three sessions, surpassing their 20, 50, and 200-day EMAs. The stock shows a positive crossover of the 20-day EMA over the 50-day EMA, which is a bullish signal.
Wipro shares, despite being excluded from the NIFTY IT index, have rallied over 7%. They trade above their 20 and 50-day EMAs, showing signs of momentum recovery. The 200-day EMA at ₹195 remains a significant resistance.
What Does This Mean for the NIFTY IT Index?
The NIFTY IT index appears to be bottoming out after the recent rally. It has been trading below its long-term moving averages since February 2026 and failed to cross them in August and September. Currently, the 200-day EMA level of 31,024 is a crucial resistance. A sustained move above this level could strengthen the momentum further.
On the downside, the upward sloping trendline support is near 28,800, while resistance is around 31,000. A breakout or breakdown from this range will likely determine the future direction of the IT sector.
Frequently Asked Questions
Q: What caused the recent rebound in IT stocks?
A: The rebound was mainly driven by positive quarterly earnings reports and technical recoveries in key stocks, which boosted investor confidence.
Q: Which IT stocks showed the strongest performance?
A: TCS, HCL Technologies, Infosys, and Tech Mahindra showed strong gains, with HCL Technologies and Tech Mahindra crossing their 200-day EMAs.
Q: What are the key technical levels to watch for IT stocks?
A: The 20, 50, and 200-day exponential moving averages (EMAs) are important. Crossing above the 200-day EMA is seen as a bullish signal.
Q: How is the NIFTY IT index performing overall?
A: The index has gained over 10% in four sessions and is showing signs of bottoming out, but it needs to break above the 200-day EMA level of 31,024 for sustained momentum.
