Category Archives: IT Sector

IT Sector in trouble?

Long term investors who have been investing since 2 Decades would be having atleast one IT stocks in their portfolio but the charm of IT stocks seems to be fading out. Since last year we have been witnessing under performance from this sector and now finally it seems to losing complete long term strength.

13th_nov

Above chart is of a NSE IT index and the time frame in picture is weekly. There are two things to be noted technically in this chart, First: Index has been trading in lower channel since the start of 2015 and we are about to break this channel on downside next week which could trigger sell on all Blue chip IT stocks from Long term portfolio. So a trade below 9400 on the index is going to be a first confirmation. Second: Index has traded and closed below 200 Week Average for the first time since 2011 last week…..But looking at indicators may be a pull back could be witnessed. Though not sure of such a pull back so would recommend to start off loading IT stocks on each rise from next week. On the upside resistance could be 11400 while downside the valley is deep!

Some IT stocks charts supporting the fall

Infosys: Stock has closed below 200 Week average with volumes

infy

TCS: Stock has just started dipping out after a consolidation of 2 weeks so its better deal to short TCS then Infy at Current levels

tcs

WIPRO:  Stock has already been hit due to many fundamental reasons so looking at chart, its a completely avoid trade at this level for any side

wipro

HCLTECH:  Stock has been outperforming other blue chip IT companies and its only IT Stock still trading above 200 day average ..

hcl-tech

Strategy:

So now next week we need to first wait for NSEIT Index to give confirmation of trading below 9400. 

Looking at the volatile markets and uncertainty ahead we could go with a spread among IT companies….

Sell HCL Tech and Buy WIPRO…....

Will post again if we get some confirmation!!

CLOUDS WOULD DRIVE IT SECTOR AT HEIGHTS:-

Clouds can be classified as public, private or hybrid. Cloud computing is about renting processor power and data storage capacity from infrastructure–as–a– service providers such as Amazon. This means the whole services and information data of a company is stored at one place and from where we can take information stored in any device connected to it whenever we need it with the help of cloud.
Cloud computing has been around for a quite some time, and goes as far as the birth of e mail. With the help of this cloud computing software the companies have started renting servers and storage instead of purchasing hardware and running at huge costs. And with more organizations – especially those that rely on India’s outsourcing infrastructure – transferring some of their IT work onto the cloud and this has helped companies to facilitate that shift and have positioned themselves as enablers between owners and renters. It was published in a survey on IT sector that in India alone the market for cloud based services will rise by a third to $557 million this year, and more than triple by 2018.
Infosys has been actively growing its cloud based services business, using its cloud-based services business, using its Cloud Ecosystem Hub. This could well be the heart of its future. In its June quarter results, Infosys announced that its cloud and big data business has executed more than 260 engagements, and has won 20 contracts in the last quarter itself.

With the use of cloud, the companies can conduct their operations at an ease and can provide services also at low cost through internet. This will help the IT sector to boom at its best and develop with a friction of time. Hence, we are bullish on IT sector companies – Infosys, HCL Info system, and Infinite Computer Solutions.