LTIMindtree, Tata Elxsi, Tata Technologies at 52-week lows amid IT sector downturn

NIFTY IT was the biggest sectoral loser last week, falling 4.49% amid global uncertainty after U.S. President Donald Trump imposed several import tariffs. NIFTY IT touched an 8-month low as domestic IT companies came under heavy selling pressure. On Monday, the NIFTY IT index continues to trade lower, down 0.48%.

IT stocks Infosys, Wipro, TCS, HCL Technologies and LTI Mindtree lost between 2% and 7% on fears of an economic slowdown and a possible recession in the U.S. economy. The escalating global trade war and weak U.S. economic data could impact U.S. companies' sales, leading to lower revenues and a reduction in IT spending. This would result in fewer orders for domestic IT companies.

Stocks in focus

• LTIMindtree's break below its 200-week exponential moving average (EMA) and the decisive breach of the May 2022 trendline on the weekly chart highlight the weakness. A 5% weekly decline, coupled with the breaching of key support zones, underlines the potential for a reversal in the stock's long-term trend.

• Tata Elxsi's attempted rebound failed, with the stock resuming its downtrend and closing the week down over 6%. Trading below its 21, 50, and 200-week EMAs confirms the stock's weak broader trend. Immediate resistance is observed around ₹6,200, while crucial support lies near ₹4,300.

• Coforge slipped below it 50- week EMA and formed an inside candle on the week chart. It is currently consolidating between the ₹8,006 and ₹7,098 and a break of this range on the daily closing basis will provide further directional insights.

Bearish outlook on LTIMindtree, Tata Elxsi and Coforge

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