Short-term investors can look to buy the stock now for a possible target towards 1400-1600 levels in the next 3-6 months, suggest experts.
The largecap IT stock which is also part of the S&P BSE Sensex index, hit a record high of Rs 1350 on 4th December 2023. It has risen over 2% in a week and over 6% in a month.
After making a bottom above 1,200 levels, bulls pushed HCL Technologies stock above the swing high of 1311 on 18th September 2023 which resulted in the formation of a rounding bottom.
The IT stock gave a breakout in the last week of November to hit fresh record highs in December and the chart pattern suggests that the rally is likely to continue, suggest experts.
“On the daily timeframe, the stock has broken upward from a rounding pattern, signalling a continuation of the prevailing uptrend. This breakout, combined with sustained RSI levels, strengthens the case for further upward movement,” Suraj Bathija, Founder & CSO at AlgoBulls, said.
“The stock is in a clear uptrend, supported by various technical indicators. Multiple confirmations, including Fibonacci retracement, bullish candlestick pattern, and rounding pattern breakout, enhance the conviction in the bullish trend,” he said.“The stock is anticipated to continue its upward trajectory, with an initial target of INR 1450. If HCL Tech manages to sustain above this level, the next target could be INR 1650 in the next three to six months. To manage risk, a stop-loss (SL) is recommended at 1245,” he recommends.
According to the Fibonacci retracement, the stock witnessed a retracement of 50% from its gain between March 2020 (375) to September 2021 (1377).
This retracement level coincides with a crucial support point, adding strength to the potential upward movement.
“Across daily, weekly, and monthly timeframes, the RSI consistently registers above the 60 levels, indicating strong momentum and buyer interest. This alignment across multiple timeframes adds credibility to the bullish outlook,” added Bathija.
AgenciesThe Relative Strength Index (RSI) has been a significant indicator supporting the bullish thesis.
“The RSI has consistently found support around the mid-level of 50 on the monthly time frame, aligning with the 50% retracement level. This convergence suggests a robust foundation for a sustained upward trend,” he said.
“Additionally, the breakout from the rounding pattern was accompanied by increased volatility, marked by the closing of the breakout candle above the upper Bollinger band. This signifies potential acceleration in the bullish momentum,” added Bathija.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)