HCL Technologies Share Price Spikes With IT Rally Extending Run

Summary:
• HCL Technologies share price rose to the highest level on Monday since mid-March, with the Indian IT stocks upbeat momentum looking strong.

HCL Technologies share price rose to near four-month highs on Monday, hitting an intraday high of Rs 1,636.40 before easing to trade at 1,575.95 at the time of writing. HCLTECH share price was already on an upbeat momentum originating from Friday’s release of forecast-beating earnings by Tata Consultancy Services (TCS). The Indian IT giant rose by 6.6 percent on Friday, with its earnings release triggering an industry-wide market rally.

Similar to TCS, HCL Technologies registered better-than-expected earnings on Friday, after its consolidated profits rose by 20 percent to  Rs 4,257 crore for the quarter ended June . Furthermore, the share price is up by about 10.1 percent as of this writing, versus the Nifty IT Index whose gains stood at 10.4 percent as of this writing. Therefore, assuming that the HCLTECH share price will match the industry average, the stock still has some headroom for growth this week.

Indian IT stocks have been on the rise in the last two trading sessions, and the resulting sentiment could push HCL Technologies share price higher. Also, the easing of US inflation rate has solidified perceptions that the Federal Reserve will slash interest rates starting September. As of this writing, the CME FedWatch Tool indicates that the odds for a 25 basis point cut have risen to 93 percent.  Indian stocks are among the leading overseas beneficiaries of Fed rate cuts as, as it could mean more capital inflows.

Technical analysis

The HCL technologies share price momentum signals control by the buyers above the 1,566.25 pivot mark. The upside will likely continue if the price stays above that mark, with the first resistance likely to be at 1,580.20. A move beyond that mark will strengthen the bullish momentum and could send the price higher to test the next barrier at 1,592.70. Alternatively, a move below 1,566.25 will favour the sellers to take control. The downside will likely find the first support at 1,551.70. Extended control by the sellers could break the support, invalidate the upside narrative and send the price lower to the second support at 1,540.80.