TCS share price rises near 8 pct on buyback hopes; experts expect big rally in other IT stocks too

Tata Consultancy Services or TCS share price has skyrocketed nearly 8 per cent in the last two trading sessions. According to the stock market experts, this rise in TCS shares is because of the buyback hopes floating in the markets. However, experts also said that due to the rise in TCS stock price, some other IT stocks — Tata Elxsi and MindTree — will also head northward.

Speaking on the TCS share price rise in the last two days, Sumeet Bagadia, Executive Director at Choice Broking said, "TCS share price is rising because of the buyback news floating in the market. TCS is going to announce its second quarter results tomorrow and the market is hoping for a buyback announcement."

On TCS share price outlook, Bagadia said, "TCS shares have already appreciated to the tune of near 8 per cent in the last two trade sessions. One should wait for some correction in the counter or breakage of the immediate resistance at Rs 2,700 per share levels." 

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He said that there can be some correction in the TCS counter before the quarterly result announcement and if that happens one can buy TCS shares in the range of Rs 2,550 to Rs 2,600 for the target of Rs 2,700. If it breaks Rs 2,700 levels then it may appreciate to the tune of 2,850 to Rs 2,900. So, any dip in the TCS shares tomorrow should be seen as a buying opportunity. 

However, he said that it may happen that TCS may not correct to this level. In that case one can have a plan B as well. In the case of correction in TCS shares, one can buy in the range of Rs 2,550 to Rs 2,600 maintaining the stop loss at Rs 2,490 and if the TCS share doesn't fell to this levels and breaks Rs 2,700 mark, then one can buy TCS above Rs 2,700 maintaining the stop loss at Rs 2,650. But, in both cases, the target would be the same Rs 2,850 to Rs 2,900 in a fortnight.

Expecting other IT stocks to follow TCS rally, Rohit Singre, Senior Technical Stock Analyst at LKP Securities said, "IT stocks have been on the upside for the last few trade sessions and any dip in TCS, Tata Elxsi and MindTree shares should be seen as buying opportunity." Singre said that one can buy Tata Elxsi shares at Rs 1,300 for the target of Rs 1,400 to Rs 1,450. Similarly, he suggested stock market investors to buy MindTree shares at around Rs 1,300 for the target of Rs 1,450." Currently, both IT shares are oscillating around Rs 1,375 and profit-booking in both stocks is strongly awaited.