Nifty IT Index at a multiple resistance breakout

After struggling from November 13, finally Nifty IT index succeeded in giving its multiple resistance breakout at 11340-11350 levels. Meanwhile, the index had formed a kind of inverse Head & Shoulders pattern though on the upside and witnessed a breakout at 11345 on Thursday, when otherwise the markets remained lethargic. The upside was supported by justifiable volumes and 14-period RSI quoting at 60 with a positive crossover, depicting momentum.

HCL Technologies which holds 16.58 per cent weightage in Nifty IT index surged nearly 2 per cent pulling the indices to trade on a positive note. The stock is almost at day’s high and with further upside, it may pull the index higher. Even Infosys contributing 26 per cent to the index had surged 1.3 per cent in the early trade bringing cheer to the index. The second IT giant, TCS too is off its year old upward sloping trendline support level and has given little upside.

This is for the second straight session that the Nifty IT index is up. The index sustained 11345 mark on closing basis and hence it holds potential to move up in the near term. Considering the weekly time frame, the index has already given a downward sloping channel pattern breakout in July, but the index seems to be moving very gradually towards its goal.