Nifty IT at a Crucial Support: Bounce Back or Breakdown Ahead? Technical & Trend Outlook - 05.04.2025
Nifty IT at a Crucial Support: Bounce Back or Breakdown Ahead? Technical & Trend Outlook - 05.04.2025
K Karthik Raja (Market Educator & Technical Analyst)
MCA | MBA | M.Com | MSc Psychology | PGJMC | CST | MDAT | CFA Pursuant
Key Factors Affecting Nifty IT:
- Global tech sentiment remains cautious amid rising geopolitical tensions and a high-interest rate environment.
- Rupee stability and moderation in wage costs are supporting margins for Indian IT giants.
- Earnings downgrades by a few large-cap IT names have weighed on investor sentiment.
- FII flows remain mixed, with selective buying seen in large-cap IT stocks.
Key Levels to Watch:
- Immediate Resistance: 39,800
- Support Zones:
- Primary: 33,800 – 33,500 (aligned with 200-week MA)
- Secondary: 32,000 (psychological level + past consolidation zone)
- A break below 33,500 could invite further downside; stability above this level may trigger a relief rally.
Volume Analysis:
- Volume has dropped post recent sell-off, indicating weakening selling pressure.
- No strong buying spikes yet, suggesting investors are cautious at current levels.
- Watch for volume surges near the 33,500 zone — this may signal reversal or breakdown.
Dow Theory Chart Analysis & Observations:
- Long-term uptrend remains intact, but current phase is a retracement within a bull cycle.
- Price is testing the 200-week moving average, historically a strong support level.
- RSI at 29.50 signals oversold conditions – bounce likely if support holds.
- MACD remains negative, but divergence narrowing – early signs of bottoming.
- ADX at 29.24 indicates the presence of a trend, but it’s not highly directional yet.
Stocks to Watch in the IT Space:
Infosys
TCS
HCL Tech
LTIMindtree
Tech Mahindra
Persistent Systems
Market Insights
Short-Term View:
- Nifty IT is at a make-or-break level.
- Expect sideways movement between 33,500 and 38,000.
- A bounce from current support could lead to a quick move toward 38,000.
- Failure to hold 33,500 may open downside toward 31,500–32,000.
Long-Term View:
- Structure remains bullish if the 200-week MA holds.
- Once consolidation is over, potential upside targets could be 42,000–45,000.
- Long-term investors may consider gradual accumulation on dips near 33,500.
Disclaimer:
This article is for educational and informational purposes only. It does not constitute financial advice or a recommendation. Always consult with a certified financial advisor before making any investment decisions.
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