Wipro shares have risen 17% in six months; what’s ahead for this IT counter on the technical charts?

Wipro Ltd saw a significant decline in its shares during Friday’s trading session, mirroring the downward trend observed in other Indian IT stocks. This dip followed an announcement from the US software giant Accenture, which revised its revenue forecast for fiscal year 2024 downwards. Accenture holds a prominent position as the barometer for the Indian IT sector, as its performance often indicates the health of clients in major Western markets—a crucial factor influencing revenue streams for Indian IT firms. Therefore, fluctuations in Accenture’s projections can have a ripple effect on the entire Indian IT landscape, prompting reactions in the stock market.

Today, the stock experienced a decline of 4.24 percent, reaching a daily low of Rs 479.45. Currently, it is trading 2.49 percent lower at Rs 488.25. At this valuation, the stock has shown a 16.62 percent increase over the past six months and a 2.32 percent rise year-to-date (YTD).

In terms of technical analysis, the stock’s support level appears to be around Rs 483, while resistance could be encountered in the vicinity of the Rs 500 mark.

According to Ravi Singh, Senior Vice-President of Retail Research at Religare Broking, the stock appears to be showing weakness based on daily charts and could potentially decline towards the Rs 460 level. He also mentioned that resistance is likely to be encountered at Rs 492.

AR Ramachandran of Tips2trades suggests that Wipro seems somewhat bearish based on daily charts, with notable resistance expected at Rs 502. He further indicates that if the stock closes below the support level of Rs 483 on a daily basis, it could potentially target a downward movement to around Rs 455 in the near future.

The stock was trading below the 5-day, 10-day, 20-day, 30-day, and 50-day simple moving averages (SMAs), but above the 100-day, 150-day, and 200-day SMAs. Additionally, the stock’s 14-day relative strength index (RSI) stood at 38.18. An RSI below 30 indicates oversold conditions, whereas a value above 70 is deemed overbought.

The company’s stock is characterized by a price-to-equity (P/E) ratio of 29.27 and a price-to-book (P/B) value of 4.89. Its earnings per share (EPS) are recorded at 17.10, accompanied by a return on equity of 16.69%.

On the BSE, approximately 5.08 lakh shares were traded today. This volume surpasses the two-week average volume of 2.30 lakh shares. The turnover for the stock amounted to Rs 24.63 crore, contributing to a market capitalization (m-cap) of Rs 2,54,535.52 crore.

Additionally, the IT company recently announced that its subsidiary, Wipro IT Services LLC, has agreed with General Motors and Magna International to establish a new entity called SDVerse LLC.

Before this announcement, Wipro named Anne-Marie Rowland as the Chief Executive Officer of Capco. Rowland will be reporting directly to Wipro’s CEO and Managing Director, Thierry Delaporte.

Also Read: Accenture

Furthermore, she will join Wipro’s executive committee (WEC). Capco, a subsidiary of Wipro, is an international technology and management consultancy specializing in the financial services and energy sectors.