tech mahindra share price: Chart Check: This Sensex stock breaks out from a downward sloping trendline; time to buy?

Tech Mahindra Ltd, part of the Indian IT sector, rose more than 3% in a week to break out from a Flag pattern on the weekly charts and is consolidating at the breakout area of 1-year long consolidation.

Tech Mahindra stock which is also part of the S&P BSE Sensex hit a 52-week high of Rs 1,276 on 8th September 2023.

The stock gave a breakout from a downward sloping trendline on the weekly charts and a Flag pattern on the daily charts, suggest experts.

The breakout has opened room for the stock to head towards 1500 levels, feel experts.

The stock is also consolidating around the breakout area of 1170. The stock hit a high of 1165 in September 2022 but it failed to hold on to the momentum. It found support above 950 levels before bouncing back.

The stock gave a breakout from the said range in July 2023 but quickly pared gains. It found support above 50-week moving average on the weekly charts towards the close of July 2023.

The stock is now consolidating above the breakout area. It closed at Rs 1262 on 8 September 2023. The stock has been making higher highs and higher lows for the past 2 weeks.

In terms of price action, the stock is now trading well above most of the crucial short- and long-term moving averages, which is a positive sign for the bulls.


The daily Relative Strength Index (RSI) is at 65.5. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal Line, this is a bullish indicator.

The Nifty 50 index has recently broken out on the upside after consolidating for over a month within the range of 19250 to 19600, indicating a bullish trend.

Similarly, the IT Index has also given a breakout after consolidating for 16 months, and the IT sector is currently in a positive movement.

“While mid and small stocks were previously doing well, now even large-cap stocks are gaining traction, which is a good sign for the IT index and the overall market,” Kapil Shah, Technical Analyst, Emkay Global Financial Services Limited and Trainer at FinLearn Academy, said.

“Tech Mahindra stock has recently broken out after consolidating for more than a year, with the stock restarting the internal support level and resuming an upward trend, indicating a bullish trend after a long hibernation period,” he said.

“The stock has found support at its long-term moving average level, and the short-term moving average has started to tilt upwards, indicating positive strength in the price. The stock has also breached a tiny falling trendline and has given a breakout from a flag pattern on the daily chart, with continuous support from a short-term upward sloping channel,” highlighted Shah.

“Based on the technical setup on Nifty, IT sector, and TechM, there is a buy opportunity in the range of 1270 to 1240, with a stop loss of 1180 on a closing basis,” he recommends.

“The stock has an upside potential of up to 1500 to 1550 levels, and the duration of the trade can be up to 1-2 months,” added Shah.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)


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