A Potential Reversal in Sight
TCS has recently witnessed buying interest near the 50% Fibonacci retracement level (3780) of its previous rally from 3,311 to 4,255. This buying activity, coupled with positive divergence on the daily charts, suggests a potential weakening of selling pressure.
From a short-term perspective, we anticipate the stock to retrace its recent decline and climb towards the 4,070 – 4,100 range. To manage risk, a stop-loss should be placed at 3,850 for long positions.
Looking at the broader trend, TCS has been in a downtrend since December 2023. However, the recent price action indicates a potential trend reversal, with the formation of higher highs and higher lows on the daily charts.
Further supporting this bullish outlook is the positive crossover on the daily momentum indicator, signaling a buy signal. This confluence of technical indicators suggests further upside potential for the stock.
In the short term, we project a rally towards the 503 – 522 range. A stop-loss of 453 is recommended for long positions.
This analysis is based on the technical research of Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas. The views expressed are his own and should not be considered investment advice.