Amid uncertainty surrounding U.S. tariffs and the Federal Reserve’s interest rate decisions, the Indian IT sector seems poised for a fresh rally. After enduring a four-month downtrend, the Nifty IT index is now showing signs of recovery. With the broader international market sentiment improving regarding U.S. tariffs and price levels beginning to stabilize, certain stocks are now presenting an attractive risk-reward ratio, making them appealing for long-term portfolios.
The Nifty IT index had a volatile journey in 2024, but it still delivered a robust return of 53% from January to December. The index reached an all-time high (ATH) of 46,000 before facing significant selling pressure, resulting in a sharp correction of around 33% over the next four months. This downward trend saw the index dip to a low of 30,900. However, it has since bounced back, staging a strong recovery with a rise of 1,800 points (from 30,900 to 32,500), marking an impressive rebound of approximately 5.96%.
Previously, after a 33% correction and the 14-period RSI reaching a low of 20, the Nifty IT index showed a strong bounce. This wasn’t just a temporary rebound but marked the beginning of a fresh rally. This suggests that the market may be stabilizing after a period of high volatility and weakness, with the potential for a trend reversal.
Wipro: Trading at Strong Support
Wipro has experienced a sharp 30% decline from its peak in January 2025, with its price falling from ₹324 to ₹228. However, recent price action suggests a potential trend reversal, as the stock has shown a strong rebound from key support levels. This could indicate renewed investor interest and the beginning of a bullish phase.
Key Technical Indicators Supporting Wipro’s Reversal:
- Multiple Trend-line Support: The stock is currently trading at the intersection of two important trendlines—one falling and the other rising—both of which are crucial for determining the trend’s direction.
- Inverted Hammer: A bullish reversal candlestick pattern (Inverted Hammer) is forming at significant support levels, suggesting a potential trend change.
- Fibonacci Retracement: The stock is finding support at the 50% Fibonacci retracement level, a key area for potential reversal.
- Price vs. Volume: Despite the recent price decline, volumes have not increased significantly, which typically signals a major reversal in trend.
Outlook for Wipro:
Wipro delivered a solid 55% return from May 2024 to January 2025 but has since entered a corrective phase, dropping from ₹324 to ₹228. However, early signs of recovery are now evident. The stock has found support at key trendlines, is trading above an important Fibonacci level, and has formed a bullish reversal candlestick pattern. The recent price decline, coupled with lower trading volumes, suggests that Wipro may be poised for an upward move.
Info Edge: Bullish Reversal in Play
Info Edge has experienced a 36% decline from January 2025 to the present. However, the stock is now showing signs of a potential reversal, with bullish signals emerging on the weekly chart since April 2025. These technical indicators suggest a possible trend shift, indicating that a recovery phase may be underway.
Key Technical Indicators Supporting Info Edge’s Reversal:
- Rounding Bottom Breakout: Info Edge recently broke out from the classic bullish continuation pattern, the rounding bottom, and is now re-testing that breakout level.
- Traditional Trendlines: The stock has maintained a steady uptrend, supported by multiple uninterrupted rising trendlines.
- Volume Surge Confirming the Breakout: The rise in both price and volume confirms strong participation, validating the bullish momentum.
Outlook for Info Edge:
Info Edge delivered an impressive 88% return from January 2024 to December 2025. However, the stock has since faced significant pressure, dropping from ₹9,120 to ₹5,780. Despite the recent correction, price action is now showing early signs of a trend reversal. The stock is finding support from a key bullish continuation pattern, and the decline in volume during the recent price fall suggests that Info Edge could be poised for a potential upside move.
Final Take:
Both Wipro and Info Edge are showing strong technical signs of a potential reversal in the IT sector. These stocks are exhibiting bullish chart patterns and are re-testing previous key breakout levels, indicating increasing momentum. While market volatility remains a factor, these stocks may present attractive upside opportunities for both traders and investors.
Ongoing monitoring of key resistance levels and confirmation signals will be essential, as the next move could be imminent.
Disclaimer:
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
As per SEBI guidelines, the writer and his dependents may or may not hold the stocks/commodities/cryptos/any other assets discussed here. However, clients of Jainam Broking Limited may or may not own these securities.
Kiran Jani has over 15 years of experience as a trader and technical analyst in India’s financial markets. He is a well-known face on the business channels as Market Experts and has worked with Asit C Mehta, Kotak Commodities, and Axis Securities. Presently, he is Head of the Technical and Derivative Research Desk at Jainam Broking Limited.
Disclosure: The writer and his dependents do not hold the stocks discussed here. However, clients of Jainam Broking Limited may or may not own these securities.
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