The IT sector is looking quite lucrative during this ongoing market fall. Much of the support to the sector is coming from a consistent plunge in the rupee against the US dollar. The Dollar index surged to a new 2-decade high of over 114.5 as the market-wide rout continues across the globe. The surged to a record high of 81.93 so far, inching towards the 82-mark. This relentless fall seems to be the biggest factor holding the IT space in this ongoing selling spree.
While many IT stocks are rising from their lows, one stock has come on my radar that is noticeably above the lows and today has given a trendline breakout on the daily chart. The company is Tanla Platforms Limited (NS:) which is a cloud communications company that provides value-added services to the communication space. The company has a market capitalization of INR 9,846 crores and its stock is quite volatile.
Image Description: Daily chart of Tanla Platforms showing trendline breakouts
Image Source: Investing.com
Today, as the IT space is showing resilience against the market fall, the share price of Tanla Platforms hit an upper circuit of 5% to the last traded price of INR 761.6 as investors flee to buy the company’s shares in a hurry. Today’s rise has come amid a consistent fall in the last few sessions which is making today’s move a reversal point. The stock has also surged past its falling trendline resistance on the daily chart which is the early warning of a trend change. The upper circuit would also ensure that the stock closes above this trendline.
The exact same pattern had been repeated in the recent past as well. In August 2022, the stock also kept on tumbling as it fell prior to today’s breakout, and back then it soared above the falling trendline resistance to give a very sharp rally. In September, the stock again seems to be repeating history and getting ready to roll again. The stock has support around the immediate swing low of INR 710 which if broken, then the stock could take some more time to rally back to previous swing highs.
On the upside, the rally could continue till the nearest level of INR 825 which could probably come in a week’s time. However, investors still need to be cautious as the broader market sentiments look quite weak and the volatility is almost around a 3-month high.
