In the last few months, technology stocks has lent tremendous support to benchmark indices like Nifty and Sensex, thanks to the various buy-back announcements and strong dollar. Technology stocks have acted as a defensive bet during volatile times and helped Nifty to rally.
Although NIFTY IT is trading at all-time high, price pattern suggest lapse in momentum and formation of trend reversal pattern on the medium term perspective. An appearance of rising wedge pattern calls for caution and opens downside risk of 14% in the near term. At present, the breakdown levels is mere 2.2% away, but from current levels one needs to remain highly cautious.