Tech stocks not in rally to lead slide

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: a sharp decline since January and have lost 63% in the current bear phase. The price correction may have been over, while the time correction is yet to happen. Investors must now start keeping a track of strong relative strength stocks which are now not falling in line with the indices. Keep a track of these stocks and once the indices bottom out, these stocks could lead in the next bull run. Also keep a close watch on the volume action as currently there is a decline with strong volumes and rises with thin volumes. Once this reverses, money flow indicators will turn positive and signal the sign of a new bull run.

In the last week, the Sensex ended 7.63% lower and the Nifty lost 7.16%. The realty sector which had lead the rally started to lead the decline as the BSE Realty index was the largest loser ending at 12.85% lower followed by the BSE Metals index which lost 8.92%. The sectors which have registered a lower percentage loss were the BSE Healthcare Index which lost 2.45%, followed by the BSE FMCG Index which lost 3.67%. Tech stocks have not participated in the last intermediate rally and could take a lead on the downside if the indices start falling sharply. This will give traders an opportunity to trade on the short side in this sector. We will take a look at some stocks in this sector.

Infosys

Infosys did not participate in the earlier intermediate rally and just drifted sideways as the indices and many stocks rallied in December. Thus the short term relative strength for the stock has turned weak and could lead the decline once it drops below its support levels. On the daily chart, the supports are between 1,078 and 1,088 and a close below this zone will confirm an intermediate downtrend. The stop for the short positions is far away at 1,204 and a lower minor high will lower this target. On the weekly chart, the stock has a support at 930 and could decline to this level once this support zone is broken. Look for a trade on the short side. Investors must currently stay away from the stock as the major trend remains down and the relative strength weak.

TCS