IT Stocks: Nifty IT at crucial 30,000 level; Should investors book profit? Anil Singhvi answers

IT stocks may witness profit booking after a sharp rally in recent sessions, market expert Anil Singhvi said on Thursday, adding that the IT index could face strong resistance in the 29,600-30,000 range.

Zee Business Managing Editor, Anil Singhvi, said the IT index had risen nearly 7-8 per cent in seven consecutive sessions, but signs of exhaustion were now visible after the sector closed lower in the previous trading session.

He said the Nifty IT index ended around 29,185 after falling nearly 0.5 per cent, breaking its three-day gaining streak.

29,600-30,000 zone seen as key hurdle for IT index

Singhvi said the 29,600-30,000 zone remains a crucial hurdle for the IT index and highlighted four major reasons behind his cautious view on the sector in the near term.

“After such a strong rally, the IT index may pause near the 29,600-30,000 range. Fresh and bigger upside will be considered only if the index decisively crosses the 30,000 mark,” he said.

Explaining the first reason, Singhvi said the IT index had created an important upward gap during the sharp fall seen on April 24 following global concerns linked to artificial intelligence-related developments.

He said the index had closed below the 30,000 level at that time and left a major gap between the April 23 high and April 24 low levels.

“Whenever recovery happens, such upward gaps usually work as resistance levels. Similarly, downside gaps often work as support,” Singhvi said.

Repeated failure near 30,000 adds to caution

The second reason, according to him, was that the IT index had repeatedly failed to cross the same resistance zone during the last two months. He noted that between April 24 and May 19, the IT index approached the 29,600-29,900 range four different times but failed to sustain above the 30,000 level on every occasion.

“It moved close to 30,000 several times, but could not cross it. Every time, it reversed from those levels,” he said.

Technical indicators also point to resistance

Singhvi also pointed to technical indicators supporting the cautious outlook. He said the IT index had corrected sharply from a high of 32,134 on April 16 to a low near 27,038 on May 14, marking a decline of nearly 16 per cent within one month.

According to him, markets generally consider 50 per cent retracement levels as important recovery zones after a correction. “The 50 per cent recovery level comes near 29,606, and the day’s high was almost the same. The 50-day moving average is also around 29,715. All technical levels are matching in the same zone,” Singhvi said.

Global cues and rupee movement remain key factors

He added that global support for IT stocks also appeared weak on Wednesday. Singhvi said semiconductor and AI-linked stocks globally were showing strength after recent developments, reducing the chances of further strong buying in Indian IT companies through the reverse AI trade theme.

He explained that Indian IT stocks had recently benefited whenever semiconductor and AI-related global stocks weakened. “If semiconductor and chip stocks globally start weakening again, Indian IT companies may once again see buying interest through the reverse AI trade,” he said.

Singhvi said volatility in the IT sector could increase in the coming sessions, and such volatility often acts as an early signal of a possible trend change. He also said the recent weakness in the rupee had supported IT companies, as a weaker rupee generally benefits export-oriented sectors like information technology.

However, he added that if the rupee stabilises, some of that support may reduce. “At present, profit booking can emerge in the 29,600-30,000 range. A fresh major rally should be expected only above 30,000,” Singhvi said.

Nifty IT falls after four-day rally

He said investors should remain alert near higher levels and avoid blindly chasing momentum after the sharp rally in IT shares.

“We are giving both sides of the market view. When the IT index was falling sharply, we advised investors not to panic. Now, after a strong recovery, we are alerting investors to higher levels,” he said.

The Nifty IT index fell on May 21 after rising for four straight trading sessions. The index was trading at 29,008.05, down 177.10 points or 0.61 per cent at 1:19 pm. Despite the decline, the index remains around 7.1 per cent higher than its 52-week low of 27,078 touched on March 14, 2026.

However, it is still about 28 per cent below its 52-week high of 40,301.40. During the session, the index touched an intraday high of 29,328.35 and a low of 28,964.95. Among index constituents, Wipro and HCLTech traded in the green, while Coforge, Persistent, Tech Mahindra, Infosys and LTIMindtree were among the top losers.

On a broader trend basis, the Nifty IT index has declined 24 per cent so far in 2026 and is down 22.7 per cent over the last year.