IT sector set to hit new highs; Infosys and TCS to lead strong rally: Rajesh Palviya, Axis Securities

ET Now: Tell us your view on how you see the IT sector as this sector has registered its highest weekly gain in the last 10 weeks, it has been the top performing sector, outperforming all its peers as well. And when you look at the Q1 earnings, they have also been more or less positive. So, good numbers have also come in. Do you think this is the time for IT to get back on track? Do you think it has already started picking up? And does it look like a comfortable sector for you now? And also, if you were to invest in this sector, how would you do it? Would you stick with the large-cap names or are you seeing more value emerging from this sector? IT Midcap?

Rajesh Palviya:So, a very strong rally in Nifty IT, almost 4.5% gain for this week. And the way the Nifty IT index has rallied, there is a strong possibility that again, we may see a new all-time high trajectory for the Nifty IT index in continuation of this upward move. This rally is driven by most of the largecap IT as well as midcap IT. Participation came from both segments.

Again, global volatility has also cooled down and global markets are also performing well in the last few days. So, we think yes, IT might be the only sector that one can focus on right now and we could possibly see a new all-time high trajectory for Nifty IT. And from large-cap IT, I think some of the stocks where we feel we can see a bit more bullishness in the near term are Infosys and TCSThese two stocks look promising based on their technical structure. We believe Infosys can continue to rise and its possible target could be between 1900 and 1930.

And another stock from the large-cap IT sector is TCS. Again, the way the stock has rallied in the last two trading sessions, there is a strong possibility that TCS will also register its new all-time high trajectory in the coming days and a possible target towards 4550, 4600, which we can see in a short period of time. So, TCS can be seen from the large-cap IT sector. Even from the mid-cap IT sector, I think one should focus on Coforge and Mphasis. These two stocks look very promising. The way both the stocks have managed to break out of the consolidation range, we think that in the mid-cap IT sector, these two stocks can be seen, Coforge for a bullish target of 6250 and Mphasis we can see a target towards 3100. So, these four stocks, one can implement some long-term trades for a short period of time.

ET Now: What are the stock picks What do you have in store for our viewers for next week? Tell us what you’ve chosen.

Rajesh Palviya:The first stock is Tata Motor, which belongs to the automobile sector. There is short covering on the derivatives data today. The way the stock has managed to fill the bearish gap on the daily chart, we believe there is potential for further upside here. The possible target for Tata Motor could be seen towards 1140 to 1150. Therefore, one can buy and accumulate this stock with a stop loss of 1068. The second stock is ITC. The stock is poised to give a big breakout from the long consolidation range. The stock is now trading within its multiple supply zone. The way the stock has shown long accumulation on the derivatives data, we believe there is potential for further upside here towards 520 to 525. Therefore, CCI is to buy with stop loss of 494. And the third stock is ICICI General Insurance. Again the stock managed to regain its all time high trajectory. The stock managed to break its previous high after a brief corrective move towards 20 day moving average. The way the stock has shown a long accumulation, we believe there could be a continuation of the uptrend here, the possible target we can see is 2115 with stop loss of 2015, one can initiate a long position.