Sector Spotlight: Having witnessed significant correction since the announcement of March quarter results, top IT sector stocks are now exposed to limited downside, opines Technical Analyst Nilesh Jain. He recommended three large cap stocks to investors arguing that in an otherwise situation of stock market gloom, IT stocks could lead the revival.

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He puts his bet on HCL Technologies Limited, Tata Consultancy Services Limited and Infosys Limited.

Jain also calls a weaker Indian Rupee against the US Dollar, a blessing in disguise for IT companies and sees a robust Dollar revenue for these large cap IT companies.

This in turn will likely help the stock price taking an upward trajectory, Jain said.

Jain is Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking.

On Monday, the benchmark indices BSE Sensex and Nifty50 ended in the red falling by nearly 0.7 per cent. While the former ended at 54,470.67, down by 364 points, the latter closed at 16301.85, down by over 100 points. Among the sectoral indices, Nifty IT was the only index to end positively, although marginally.

Nifty IT ended at 30,733.30. In the 10-share index, 4 stocks advanced while 6 declined.  It was trading almost flat when the markets opened on Tuesday  30,738.40. Eight out of the 10 stocks in this index were trading positively around 9:20 am. Coforge and Mphasis were the top gainers while Infosys and Wipro were among the losers. Jain said that IT shares may witness first signs of reversal and the index may test levels of 31500 in the May series. It has a support 30400, the AVP said.

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TCS: Buy| LTP: Rs 3451| Target: Rs 3600/3700| Stop Loss: Rs 3350| Upside 7-8%

TCS shares are showing signs of reversal Jain said adding that the chart shows formation of a double bottom pattern. He recommends a buy in this stock at current levels and on declines. The stock was recommended at levels of Rs 3445.The stocks were trading in the green on Tuesday and were up 0.2 per cent from the Monday closing price.

 HCL Tech: Buy| LTP: Rs 1076| Target: Rs 1120/1150| Stop Loss: Rs 1030| Upside 6-7%      

Jain said that HCL share was looking strong on the technical charts. It is showing a reversal from the oversold territory. The stock has corrected and is available at levels where the risk-to-reward is favourable, he added. HCL share was trading flat in the early morning trading session.  

Infosys: Buy| LTP: Rs 1555| Target: Rs 1700| Stop Loss: Rs 1520| Upside 8%

Infosys shares show similar formations on charts. The stock was recommended at levels around Rs 1573. Infosys shares were trading in the red and were down nearly 1 per cent around 9:20 am.  

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)