Tech Mahindra hovers at 52-week high, may surge further

Indian sectoral indices have been following the benchmark indices in their fall from all-time high levels, barring one, the IT sector. Both have fallen from their all-time highs, but Nifty IT index still outperformed the Nifty 50 index by 1.1 per cent, when most of the other sectors have duly underperformed. Not just the IT index stocks but Mid-cap and Small-cap IT stocks too surged against the benchmark indices with most of them trailing at their all-time high or at least 52-week highs. One of the good stocks out of the frontliners is Tech Mahindra.

Tech Mahindra, which forms 12.15 per cent weightage in the Nifty IT index is currently trailing at its multi-year highs. Since July 2017, the stock has seen nearly an uninterrupted rise of almost 74 per cent up to its current 52-week high. Recently, the stock has been trading in a multiple resistance range of 627-635. The stock has broken out of 635 levels in the recent candle on closing basis, yet consolidation continues. Significant volumes along with 14-period RSI positive crossover at 60 levels suggests potential upside in the coming sessions. We hold 660, followed by 700 as the next medium-term resistances for Tech Mahindra provided it breaches 640-650 on a closing basis. On the downside however, stock may retreat below 615-605 levels.