IT Stocks Back In The Limelight; Should You Buy them?

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IT stocks had been an all time favorite investment for many investors for a long time as it had the potential to yield high returns. However, recently stocks have plunged on account of a host of reasons. The recent fall in the rupee has given new hope to stocks from the sector. Take a look whether it is time to buy these stocks.

How the index has fared?

In February 2009, the Index was trading at approximately 2,000 levels. Till December 2010, it had rallied almost 275 per cent to trade at 7,500 level. In 2011, the Index corrected and slipped by almost 33 per cent to 5,000 level. Then again, in March 2015, the Index pulled itself together and rallied 150 per cent to make the high of 12,800 points. Thereafter, the correction followed again, bringing the Index down to the low of 9,300 points, declining 27 per cent in November 2016.

Decline after Trump election

The recent correction has been due to two main reasons; slowing growth and the election of Donald Trump as US President. Most IT companies have reduced their revenue guidance for the upcoming quarter. The sector sunk further into uncertainty as the Republican candidate Donald Trump was elected as the new president of the US. The country accounts for around 60% of India's software exports. During his campaign, Trump had constantly spoken against IT outsourcing and immigration. He even talked about Indian companies such as Tata Consultancy Services (TCS) and HCL Technologies. Trump is supposed to began his reign from 20th January and the scenario for the Index will get a clearer picture then.

Fresh breakout

However, the IT Index gave a breakout of a three week high of 10,110 points with the next target of 10,448 points. This makes the space attractive for investors and hence it is suggested to keep an eye on this Index which can be a wealth creator in coming days.

This is a multibagger stock

Nelco share price has seen the highest percentage change last week which is also the top 500 recommendation by Dynamic Levels. Nelco was followed by Trigyn share price that surged 2.9 per cent and FSL share price that rose 2.4 per cent. Trigyn is the multibagger recommendation while FSL is the top 500 identified stock by Dynamic Levels.

Recommendations for the F&O segment

These are the top five recommended IT stocks from F&O segments. Tech Mahindra share price has taken the biggest leap of 6 per cent last week, followed by Infosys share price rise of 5 per cent. HCL tech, TCS and Wipro share price also rose above 5 per cent. All the F&O stocks are recommended top 500 stocks by Dynamic Level.


Disclaimer: The contents of the article is sourced from the research report of Dynamic Levels with due permission. Dynamic Levels is a website owned by Dynamic Equities Pvt Limited, a member of BSE and NSE. The article is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author do not accept culpability for losses and/or damages arising based on information in this article. The author and his family do not own any shares in the above mentioned stocks.

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Read more about: infosys, tcs, wipro
Story first published: Monday, November 28, 2016, 5:08 [IST]
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