Stock of the week - Tata Consultancy Services Limited For Target Rs. 3800 By GEPL Capital
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Tata Consultancy Services
Observation
* On the monthly chart, we can see that TCS is giving consolidation breakout which has been forming since last 5 months and once again has resumed its primary Up trend.
* In the last week, we witnessed an Ascending Triangle breakout which has been forming since Jan 2021 on the weekly time frame which indicates the stock is ready for next Bull run.
* On the shorter time frame like daily charts, we can see good volume buildup as the prices breakout of a consolidation, indicating participation in the up move.
* On the indicator front, RSI plotted on the weekly time frame broke above the 50 mark on 26th May 2020 and has remained above the 50 mark ever since. Currently it can be seen moving higher towards the overbought level, indicating increasing bullish momentum in the prices. The Bollinger bands plotted on the weekly time frame can be seen expanding indicating expanding volatility on the positive side as the prices breakout of a consolidation.
* Going ahead the 3580 (38.2% extension level of the rise from 1506-3339 projected from 2880) will act as a resistance level, if this level is breached we can expect the prices to test 3800 and 4013 (50% and 61.8% extension level of the rise from 1506-3339 projected from 2880)
* Our bullish view will be negated if the prices move below the 3250 (Weekly low).
Inference & Expectations
* TCS has been in a long term bullish phase.
* On the medium term charts we can see that the prices are breaking above the Ascending Triangle pattern with decent volume buildup.
* We expect the bullish momentum to take the prices higher towards the 3580 mark immediately.
* If the level of 3580 is breached we can expect the prices to move higher towards the 3800 and 4013 eventually.
* Our bullish view will be negated if the prices breach below the 3250 mark.
* One can Buy TCS at current levels for the target of 3580 and 3800 levels with a strict stop loss of 3250 on closing basis.
Buy Tata Consultancy Services Limited LTP 3380 TGT 3800 SL 3250
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