Infosys, Wipro can trigger more downsides in Nifty IT index: Anand James

Nifty IT has entered a bear market amid concerns of a US slowdown, breaking key technical supports, including the widening wedge pattern and the 61.8% Fibonacci retracement level.

«Last time when a similar downside happened in Nifty IT in April 2000, we saw 44% fall since the break of Fibonacci golden ratio. Similar breakout favoring downsides are seen in heavyweights like Infosys, Wipro, HCL Tech, LTIMindtree and Tech Mahindra which are expected to trigger more downsides in the index,» said Anand James, Chief Market Strategist, Geojit Financial Services.

Edited excerpts from a chat:

Nifty ended the holiday-shortened week 0.7% lower. Where do you think the market is headed for the next 2-3 weeks before expectations around the Q4 earnings season start dominating headlines?

In the last 10 years, 80% of the time Nifty has seen around 3% upside in the 3 to 4 weeks prior to the start of Q4 earnings. The first 30 days since the start of the earnings season, net return in Nifty during the last 10 years has been around -0.18%. Around 80% of the time, the next 3 months have given around 8% return.

Last week harboured the hopes of 23,000-23,500, as meaningful gains post the MACD crossover is yet to materialize. We were also counting on bounce back usually seen from sub-25 RSI levels, where we were on 4th March. Incidentally, this move has mirrored the last instance of such bounce back which occurred in early August 2019, in terms of both the quantum of bounce as well as the duration.

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Further, the rejection