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BSE IT Index Faces Steep Fall, Support Levels Eyed
26 Apr
Summary
- BSE IT index is the worst performing sector, down 25% YTD.
- Technical analysis suggests potential bottoming between 24,250-27,000.
- Log charts show long-term bullish potential despite current downturn.
The Indian Information Technology (IT) sector is currently the worst performer, with the BSE IT index down approximately 25% year-to-date as of April 25, 2026. This follows a 15% decline last year, and the index has fallen about 40% from its December 2024 peak. Current technical analysis does not show a clear bottom or trend reversal.
However, strong support levels are identified. The 100-Month Moving Average at 26,930 is a key level to watch. Further support is anticipated in the 24,700-24,250 region, where a trendline and Fibonacci retracement converge. Resistances are seen at 36,000 and 39,500-40,000.
On log charts, the BSE IT index appears to be at a crucial long-term support, indicating a potentially bullish outlook over the coming years. A sideways trading range of 26,500-40,000 is possible before a breakout above 40,000 could signal a rally towards 53,000.
Historical patterns suggest a potential peak in January 2028 if past surges repeat, though a 250% rise is deemed unlikely given current fundamentals. Divergence with the NASDAQ Composite, which has risen 29% since December 2024, is also noted. Investors are advised a staggered entry strategy, investing 20% now, 30% at 26,800, and 50% at 25,600, with strict stop-loss adherence.
Investment in IT sector ETFs like Nippon India ETF Nifty IT or index funds such as ICICI Prudential Nifty IT Index Fund is recommended due to uncertainty in individual stocks.
