{"id":8295,"date":"2022-05-09T19:30:10","date_gmt":"2022-05-09T14:00:10","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=8295"},"modified":"2022-05-09T19:35:14","modified_gmt":"2022-05-09T14:05:14","slug":"tech-mahindra-will-the-counter-outperform-amid-an-it-sector-correction","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/tech-mahindra-will-the-counter-outperform-amid-an-it-sector-correction\/","title":{"rendered":"Tech Mahindra: Will the Counter Outperform Amid an IT Sector Correction?"},"content":{"rendered":"\n<p><em>This article is authored by Kunal Rambhia, a fund manager at The Streets, a private fund. He has been in the <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-equity\/\">equity<\/a> market since 2010, performing various roles such as Associate Research Analyst, Research Analyst, and Associate <a href=\"https:\/\/www.tickertape.in\/blog\/portfolio-manager\/\">Portfolio Manager<\/a>. He has media appearances with CNBC and ET NOW. Kunal is also a visiting faculty in multiple colleges.<\/em><\/p>\n\n\n\n<p><a href=\"https:\/\/www.tickertape.in\/blog\/technical-analysis-of-stocks\/\">Technical analysis<\/a> helps focus on price action and identify good opportunities amid chaos. I discovered one such opportunity with Tech Mahindra, which appears to be a clear segment leader. Herein I share all my observations!<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/tech-mahindra-will-the-counter-outperform-amid-an-it-sector-correction\/#Weekly-Time-cycle\" title=\"Weekly: Time cycle\">Weekly: Time cycle<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/tech-mahindra-will-the-counter-outperform-amid-an-it-sector-correction\/#Weekly-chart-Time-cycle\" title=\"Weekly chart: Time cycle\">Weekly chart: Time cycle<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/tech-mahindra-will-the-counter-outperform-amid-an-it-sector-correction\/#Weekly-Price-action\" title=\"Weekly: Price action\">Weekly: Price action<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/tech-mahindra-will-the-counter-outperform-amid-an-it-sector-correction\/#Weekly-Fibonacci-and-RSI\" title=\"Weekly: Fibonacci and RSI\">Weekly: Fibonacci and RSI<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/tech-mahindra-will-the-counter-outperform-amid-an-it-sector-correction\/#Weekly-Ichimoku\" title=\"Weekly: Ichimoku\">Weekly: Ichimoku<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/tech-mahindra-will-the-counter-outperform-amid-an-it-sector-correction\/#Daily-Price-action-and-RSI\" title=\"Daily: Price action and RSI\">Daily: Price action and RSI<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/tech-mahindra-will-the-counter-outperform-amid-an-it-sector-correction\/#Daily-chart-MACD\" title=\"Daily chart: MACD\">Daily chart: MACD<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/tech-mahindra-will-the-counter-outperform-amid-an-it-sector-correction\/#Ratio-chart-Techm-vs-CNX-IT-index\" title=\"Ratio chart: Techm v\/s CNX IT index\">Ratio chart: Techm v\/s CNX IT index<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/tech-mahindra-will-the-counter-outperform-amid-an-it-sector-correction\/#Daily-chart-Comparative-chart\" title=\"Daily chart: Comparative chart\">Daily chart: Comparative chart<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/tech-mahindra-will-the-counter-outperform-amid-an-it-sector-correction\/#Putting-it-all-together\" title=\"Putting it all together\">Putting it all together<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Weekly-Time-cycle\"><\/span><strong>Weekly: Time cycle<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/zOT6J2QPKnR3wGM8LX5g7uqwjS1TXJxBhQSLNM_FXX3X0remC2yqol7VFS5uPwwwMCQAZUwnQbPCrbUCWMmpKUsG9LdWAlUgviZckso0zoMLo9aUuAVWDvCzFdoXIZY-DXvsb8HI7l0c8yN_uA\" alt=\"\"\/><\/figure><\/div>\n\n\n\n<p>On the weekly chart, we can see the correction period is 22 bars on average. A couple of instances show correction of 19 bars. One such corrective phase on the counter is the present one, where 18 bars are done as of now, and the possibility of reversal is high (based on empirical observation).&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Weekly-chart-Time-cycle\"><\/span><strong>Weekly chart: Time cycle<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/p_ERvUx9mxuqoUHQdP1QpJkejCfmp8rommHBr1EAN6Xb35MOtMdoBOftrQYH79ZSI0AJBcZ1LPcO069mNoz4I6IMpxB6aYUb3OOg-mdwv07OBxMtQrlaEQIb1bbmpKHbm_x_xl3iSmYoF0O-Nw\" alt=\"\"\/><\/figure>\n\n\n\n<p>The green curves seen at the bottom of the chart are phases observed in the past. Most significant tops and bottoms have coincided with curve end (time cycle correlation with price change). Alongside the previous chart, where 19 bar reversals have been noticed multiple times, this cycle coincides with phase change (Trend change). Bright possibility of bullish reversal from hereon!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Weekly-Price-action\"><\/span><strong>Weekly: Price action<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh6.googleusercontent.com\/QNO3iDqhuJq0ZSQRk_wBRKEOylubF0M5MJlj9JxyP6sgJbG7jbHGTyw-6rspdiTokhs5C3lyx4_vmAgxvgt9Esk9u_Jjeg27L_TXFkcc8r0z841BQJiHIZ1J3mVzFdqzHKpeK7QgxZWHDAiJSw\" alt=\"\"\/><\/figure><\/div>\n\n\n\n<p>Very clear higher tops and higher bottoms are seen on higher timeframe charts from 2007 till now. A resistance line breakout was noticed first time in 2021. Generally, such massive breakouts are followed by \u201cretesting of breakout\u201d. Stock is down by approximately 28% from the top and nearing the same trendline (considering an attempt to retest the breakout). Worth considering this as a \u201cBargain buy opportunity\u201d.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Weekly-Fibonacci-and-RSI\"><\/span><strong>Weekly: Fibonacci and RSI<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/veH6dl0raCfyMYhHxh1zLFb3bTcndpMeoj3XTuEDvNlRJIIUM5bksYi3jC5r-ZtwuIZM6FzGYaScjSua4tYwBwfR9WP84eM170vRT3l_xXa9h3PLYrG6HzwMuj2UeXmZfkbR33o_9soWoYWCjw\" alt=\"\"\/><\/figure><\/div>\n\n\n\n<p>Price is forming higher tops and higher bottoms even in the recent past, highlighted by the green arrow. In contrast, the <a href=\"https:\/\/www.tickertape.in\/blog\/relative-strength-index\/?utm_source=blog&amp;utm_medium=gart&amp;utm_campaign= kunram\">Relative Strength Index (RSI)<\/a> forms lower tops and lower bottoms, creating \u201chidden bullish divergence\u201d.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Weekly-Ichimoku\"><\/span><strong>Weekly: Ichimoku<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh6.googleusercontent.com\/qe97clpc52kXw9pGF-gznYBFqkUvORRX1OmxXr5GgqSVVSlIZa7yPxRxiyWjMH7F1co20rdvKI7YrQwN3nEsKqgWMJvQFepJ7LyffK7RDu4Ah0p03P9pFargCPJS9Cvra7kkgaTuBV49TvYh6g\" alt=\"\"\/><\/figure><\/div>\n\n\n\n<p>Not highlighting the entire <a href=\"https:\/\/www.tickertape.in\/blog\/ichimoku-cloud\/?utm_source=blog&amp;utm_medium=gart&amp;utm_campaign= kunram\">Ichimoku<\/a> as a short-term crossover of Kijun and Tenkan is likely. But worth observing Ichimoku Kumo Cloud, which is offering wonderful support to the price action. The future cloud remains bullish, and the last candle also confirms a sizeable reversal. It seems, again, a perfect \u201cBargain Buy\u201d.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Daily-Price-action-and-RSI\"><\/span><strong>Daily: Price action and RSI<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/ppnR7bfSHiBi8A4_AMDIDpaj7U_b-rip-P-mf5ZQu0zXMKRvFKqZGuEHorsRJEUs65exE7--Dc609gY7PSyZH8jYca-N4Kk_fwsxFz3PBCZqouRZcV8_FeMwcuILZqUsLHBpRFstRMRcc04Sqg\" alt=\"\"\/><\/figure><\/div>\n\n\n\n<p>After making the top near 1800, the stock started its downward trajectory. By connecting tops and bottoms with trendlines, we can see a falling wedge formation on the price chart, a bullish formation. RSI is making equal bottoms alongside falling wedge, which confirms bullish divergence. The bounce in the last candle can be seen with volumes. A bright future seems ahead for the counter : )<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Daily-chart-MACD\"><\/span><strong>Daily chart: MACD<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/tXrGX9AHorwzwTzg6kkHPJBHZP9L8BMGBMFfWGyMtb6Y9eWeDMKkuY6a070zCY1r3p-XDf-42LOi4z5rijSWRf8EUsQZB34S3U_A_GPNFsP5MfoVUh512oYXWhIEBq2TLuJqqrP2fIvmqhEn1Q\" alt=\"\"\/><\/figure><\/div>\n\n\n\n<p>Though <a href=\"https:\/\/www.tickertape.in\/blog\/moving-average-convergence-divergence\/?utm_source=blog&amp;utm_medium=gart&amp;utm_campaign= kunram\">Moving Average Convergence Divergence (MACD)<\/a> is considered one of the lagging indicators in technical analysis, which confirms the trend, we can use the same indicator even to find divergences. Clearly, price is making lower bottoms, and <a href=\"https:\/\/www.tickertape.in\/blog\/moving-average-convergence-divergence\/\">MACD<\/a> makes equal bottoms, which confirms bullish divergence (just the same as RSI). Also, MACD crossover is around the corner from extreme lows, adding icing to the cake.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Ratio-chart-Techm-vs-CNX-IT-index\"><\/span><strong>Ratio chart: Techm v\/s CNX IT index<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/yAumyD9bPh1VEfat6fX7AO0na9W6w_Qrxdbl_ju77I7kWjqDpX9dIl_kx5b9E9VA0wyQVvaJEpE8_Z5k5KhvW5Ax5XBnyG7sDOaAoItykHPZbkCVOicdv5HJecQM1vr5MQQLQVD9-PF7p42FFQ\" alt=\"\"\/><\/figure><\/div>\n\n\n\n<p>The monthly ratio chart of Tech Mahindra and the CNX IT <a href=\"https:\/\/www.tickertape.in\/blog\/stock-market-index\/\">index<\/a> is shown on the left. The ratio chart has been cleared within a symmetrical triangle formation for more than ten years. The triangle is also nearing its conclusion. Also, the recent bounce is right from the support zone, confirming the outperformance of the counter over the index. The correct chart is the same ratio chart on the daily timeframe. The last two trading sessions witnessed extreme bounce, confirming outperformance of the counter in the time to come.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Daily-chart-Comparative-chart\"><\/span><strong>Daily chart: Comparative chart<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh3.googleusercontent.com\/oqNk58-OTipWWJLtMOcrYtD0Pk8GvXJ4otmv-6MTlMRUGumuaI7IVwRtU_W-9RUV_8ZsOO-ZTz0AZIVYjvO3x4TftBoxWSfUBC0UlEU-PLQ6Ra_1iPcCUbtApTPzr8OjDSpCnVlOb4K7fEgjoQ\" alt=\"\"\/><\/figure><\/div>\n\n\n\n<p>The chart shows the price action of TCS, Infosys, HCL Tech, Wipro, Mindtree and Tech Mahindra. It\u2019s very clearly visible that all counters are down, except Tech Mahindra.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Putting-it-all-together\"><\/span><strong>Putting it all together<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>On weekly charts, time cycles, change in polarity, 61.8% retracement with hidden bullish RSI divergence and Ichimoku cloud support can be seen. On the daily chart, falling wedge with bullish divergence on RSI and MACD likely outperformance of the counter on IT index on daily and weekly Ratio chart. ONLY the uptick counter on the comparative chart supports the bullish view. Therefore, one can say that Tech Mahindra can be a portfolio counter and may even outperform the entire IT pack in the time to come!&nbsp;<\/p>\n\n\n\n<p><em>Statutory Disclosure:<\/em> <em>Kindly note that this update is only for educational purposes. It is safe to assume that my personal position, fund\u2019s position, client\u2019s position, and relative\u2019s position may be open on the counter. Prefer to take the advice of your financial advisor before initiating any position.\u00a0<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Read Kunal Rambhia&#8217;s technical analysis on Tech Mahindra, which appears to be a clear segment leader to outperform the entire IT pack in the future!<\/p>\n","protected":false},"author":73,"featured_media":8297,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[9,1742],"tags":[44,15,1596,297],"acf":[],"modified_by":"Neera Bhardwaj","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2022\/05\/TT-9-May-Kunal-Tech-Mahindra-BB.jpg?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/8295"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/73"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=8295"}],"version-history":[{"count":5,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/8295\/revisions"}],"predecessor-version":[{"id":8303,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/8295\/revisions\/8303"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/8297"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=8295"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=8295"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=8295"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}