Riding the storm, TCS emerges as a defensive player with attractive upside potential

A prominent player in the IT industry has not only weathered the market storm but has also delivered an impressive rally of 3.43% in the first half of the week. This remarkable surge has been supported by substantial trading volumes, totalling 10.61 million shares. Closing above the current level is poised to confirm the breakout of a long-term continuation price pattern on the weekly chart.

Tata Consultancy Services Limited (TCS) is a leading provider of information technology (IT) services, digital solutions, and business services. The company serves a wide range of sectors, including banking, finance, insurance, manufacturing, retail, telecom, media, entertainment, and more.

TCS has experienced its share of highs and lows over the years. Notably, it reached its peak at Rs 3575 in mid-February 2023 but subsequently retraced, finding support around the Rs 3070.25 level, marking a retracement of over 78.6% from its previous rally that began in September 2022.

Recent trading sessions have witnessed a surge in buying interest, propelling the stock upward following a bullish crossover of the 5-26 and 13-26 Daily Moving Averages (DMA). Furthermore, a breakout trendline has emerged, connecting the highs from mid-February 2022 (Rs 3575) to mid-July 2023 (Rs 3549.90), indicating the presence of a sustained continuation price pattern spanning more than seven months.

In the recent trading sessions, the stock has experienced a robust 3.43% rally and is poised to close above the breakout trendline. This move has been bolstered by substantial trading volumes, totalling 10.61 million shares, sparking optimism among investors. With the potential to reach Rs 4095, representing a 15% gain from the breakout level of Rs 3560, TCS Ltd. is now capturing the attention of swing traders and long-term investors, offering a promising opportunity after the breakout confirmation for further upside potential in the market.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.