Technical Stock Pick: Breakout from Cup and Handle pattern takes TCS to fresh highs; time to buy or book profits?
Tata Consultancy Services Ltd, part of the IT sector, picked up momentum after recording a breakout from a Cup and Handle pattern on the weekly charts.
The breakout helped the stock top hit a fresh record high of Rs 4254 on 18 March 2024 amid volatility.
Short-to-medium-term traders can look to buy the stock or on marginal dips for a possible target of Rs 4900 in the next 4-5 months, suggest experts.
TCS stock price underwent a brief period of price-wise correction from January 2022. It bounced back after forming a base above 2900 levels in July-October 2022.
The consolidation seen in the past 2 years took the form of a cup-like pattern and a brief consolidation after the breakout in February 2024 made a handle kind of pattern.
The IT stock witnessed a strong momentum last week which helped it to register a breakout from Cup and handle patterns on the weekly charts.
IT stocks are showing resilience and most of the technical indicators suggest that the momentum could continue. Hence, medium-term investors can look at buying the stock on dips towards 3600.
In terms of price action, TCS is trading well above most of the crucial short- and long-term moving averages such as 5,10,30,50,100, and 200-DMA which is a positive sign for the bulls.
The daily Relative Strength Index (RSI) is placed at 63.1. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed. The daily MACD is above its center and signal Line, this is a bullish indicator.
“TCS stock has given an all-time high breakout
