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HCL Promises To Record New High For Investors!

19 May 20233 mins read by Angel One
One stock from the same sector showed decent strength and is ready to register a breakout of trend reversal pattern on the weekly and daily charts.
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On last trading session of the week, Nifty opened gap up but bulls were unable to hold this gap and lost all gains as it slipped below the closing of the last trading session. Somehow, it recovered from lower levels and in this recovery, IT sector stocks participated the most as it witnessed strong buying activity and one stock from the same sector showed decent strength and is ready to register a breakout of trend reversal pattern on the weekly and daily charts.   

The stock is HCL Tech, a leading global IT services company, which is ranked amongst the top five Indian IT services companies in terms of revenues. Since its inception into the global landscape after its IPO in 1999, HCL Tech has focused on transformational outsourcing and offers an integrated portfolio of services including software-led IT solutions, remote infrastructure management, engineering and R&D services and BPO. The company leverages its extensive global offshore infrastructure and network of offices in 46 countries to provide multi-service delivery in key industry verticals.  It operates through the following segments: Information Technology and Business Services (ITBS), Engineering and Research and Development Services (ERS) and Products and Platforms.  

Technically on weekly charts if we draw the trendline from the highs of mid-week of March 2022 (Rs 1215) and first week of March 2023 (Rs 1148) we’ll get the neckline of trend reversal pattern “Inverted head and shoulder”. Minimum possible targets of this pattern will be around Rs 1430 which is more than 25% higher from breakout level. 

On daily charts if we draw the trendline from the highs of April 5, 2023 (Rs 1113) and May 15, 2023 (Rs 1105.95) we’ll again get the neckline of trend reversal pattern “Inverted head and shoulder”. Minimum possible targets of this pattern will be around Rs 1190 which is more than 8% higher from breakout level. Interestingly, it is now trading just below the same neckline.  

Closing above today’s high will register the breakout of the pattern and if we combine both patterns minimum possible up-move can be more than 30% from current levels. Thus, it needs to be on the radar for the next few days. 

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