Trade Spotlight: Infosys, MindTree and Tech Mahindra in focus

Indian market broke a ten-day winning streak on Thursday to close below crucial support levels. The S&P BSE Sensex plunged more than 1000 points while the Nifty50 closed below 11700 levels.

Let’s look at the final tally on D-Street on Thursday – the S&P BSE Sensex fell 1066 points to 39728 while the Nifty50 closed with losses of 290 points to 11,680.

The average market cpitalisation of the BSE-listed companies fell Rs 3.3 lakh cr in a single session. The average market capitalisation fell from Rs 160.56 lakh cr as on 14 October to Rs 157.24 lakh cr as on October 15.

Sectorally, the selling pressure was seen in sectors like Teleco, Banks, Energy, IT, as well as Realty index. The Nifty Bank slipped 802 points to close at 23,072.

Stocks like Infosys which hit a 52-week high close over 2 percent lower, MindTree fell more than 8 percent, and Tech Mahindra was down more than 4 percent on Thursday.

We have collated views of experts on what investors should do when the market resumes trading on Friday, 16 October:

Expert: Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities

Infosys: 1050 should be the key retracement support level

On October 15th, the stock made yet another all-time high of 1186. In this month alone, the stock has rallied over 15 percent. On Thursday, the stock opened with a gap up and registered a fresh all-time high but quickly erased all intraday gain and finally closed near the day's lowest level.

The sharp intraday sell-off despite robust results surprised traders as well as investors. Currently, the stock is witnessing price correction and momentum indicators suggest the correction wave will continue in the near future.

However, the medium-term texture of the Infosys is very positive and likely to continue in the intermediate-term.

For the next few trading sessions, 1050 should be the key retracement support level for positional traders, and above the same, we can expect a continuation of uptrend wave up to 1200-1245.

MindTree: Weakness is likely to continue in the next few trading sessions

After a sharp price volume breakout, the stock rallied from 1400 to 1600 but due to strong selling pressure near 1600, it sharply corrected.

On Wednesday, MindTree sheds over 7 percent and the texture of the wave suggests weakness is likely to continue in the next few trading sessions.

Nevertheless, on daily and weekly charts, Higher High and Higher Low series pattern formation is still intact which suggests positional traders has been maintained a bullish stance. For positional traders, 1355 would be the trend decider level.

Trading above the same uptrend formation should continue till 1650. However, closed below 1355 traders may prefer to exit out from trading long positions.

Tech Mahindra: Fresh buying can be considered now and on dips

Post promising breakout the stock has formed lower top formation near all-time high level which is broadly negative for the Tech Mahindra.

A couple of times, the stock tried to close above the 880 resistance level. But, due to consistent selling pressure at a higher level, but it failed.

On Wednesday, Tech Mahindra shed near 5 percent and on weekly charts, it has formed a bearish candle. However, the larger trend is still on the positive side and the higher low series pattern indicating a fresh uptrend wave is not ruled out if it sustained above 765 or 50-Day SMA.

Unless it trading below Rs.765 positional traders retain an optimistic stance and look for a target RS.900 fresh buying can be considered now and on dips, if any between Rs. 811 and Rs. 795 levels with a stop loss below RS.765.