IT (Tech) Stocks - What's causing the fall?

In this recent ongoing brutal correction (Which resulted in almost 1500 points fall in a week), One Sector which has corrected incredibly but has not yet been noticed by the investing community is the Nifty IT sector.

Here’s the Chart for your reference :

Ongoing Crash

Nifty IT crashed down from 39000 levels to 33500 Levels within a span of 1 week.

That is actually Huge and the fact that it is not yet being discussed is even more absurd !!!

Let’s try to dig a bit deeper and figure out what could be the reason for such a huge fall ? Before that, lets actually see how the sector fared from last 2 years :

Meteoric Rise during the Pandemic

As you all can see, It fell from 16000 to 12000 levels during corona crash period and from there has risen up to almost 40k (which is almost 2.3 times)

Possible Reasons for the fall ?

  • One likely reason which kind of seems obvious is that Nifty IT is mimicking the fall in US and global tech indices like Nasdaq (which is linked to interest rate hike and rising yields due to inflation which causes risky high growth based asset classes to correct )

  • One more reason can be that they are falling under their own weight. (Too much of rise in too little time)

  • If we want to have a positive way of looking at things, One reason which is not that obvious but kind of possible is that the tech stocks, which benefited the most from Pandemic based restrictions from last two years. are indicating that the pandemic is coming to an end


It is extremely very likely that this fall might actually be a small blip in the larger scheme of things and the best of the sectoral move is done for the time being. But make no mistake about it, IT Stocks have created immense wealth to the shareholders in the past and selected ones will continue to do so in the future.


A big rally often finds corrections of nearly 10% or 20% in it’s way. I will advise everyone to continue holding quality scrips as this sector was still performing during lockdown times even when some others crashed to new lows.

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Come one man, 7-8% frop is not brutal, that’s just healthy correction.
March 2020 was brutal, this is nothing in compare to it. :stuck_out_tongue:


Haahaha you are kinda ryt…compared to 2020, everything is normal actually.

But, on a serious note, The correction has been 15% in 7 days which is not that less as IT is generally considered as low beta and defensive sector


I was referring to your brutal correction of 1500 points in a week on Nifty :slight_smile:
That is hardly 7-8%

Ah yeah my bad. Yeah you are absolutely right about that. :slight_smile:

As a trend follower my personal opinion is -
If you want to know the reason of rising price or falling price there are so many variables to consider , each time of the rise and fall the reason may be different there are so many global factors that can affect the market or the instruments , all the arguments we can make but no one can really predict how far the rally will go or how far the fall will…

But there is a very simple solution to the problem which was purposed by a great Martial Artist -

Be Water My Friend

I had not heard the quote and did a search and found this. This is for others who have not heard of the quote. Quite a good one.

Quote from Bruce Lee

Be water, my friend". When Lee says to be “formless”, he means that people shouldn’t allow themselves to be trapped in a certain mindset. Instead, a person should be able to adapt to certain situations, grow, and change; that’s how one can adopt the qualities of water.


Rightly said. I like holding onto stocks, and in the last 2 years, the majority of my returns are from this sector. Given the correction, that was somewhere expected given the global tech performance. Guess a comeback is possible once the correction settles. Not speaking based on my hopes but experience.

I see it as a good opportunity to add more. Started adding tcs and hcl. Will add more if there is further 5 percent fall from here. Otherwise I am good.

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I am looking at it otherway… What was I doing when it was going south :thinking:
That was a 15% opportunity in 1 week. Especially when Infy broke that 20EMA decisively.

Another lesson learnt

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That’s the difference between a long term and a short term investor.
I am never comfortable going short. :grimacing:

One great thing about IT stocks is most of them are extremely cash rich.So, yeah being a long term investor makes absolute sense. getting dividends and bonus shares more often than not compared to other sectors is an added bonus.

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anyway traders should now begin their journey as a long term investors accumulating starts with good IT stocks to grow wealth…

It’s always good to be a long term investor provided you are not timing your holdings just for the heck of it and have some serious analysis. We can ride the downswings for short term as this sector has always had a high probability of creating wealth and compounding in the long term.

Nifty IT is now near 28k…Brutal crash

RSI levels are now reaching pandemic panic levels of 25.

We can keep an eye on these stocks for one 15-20% dead cat bounce…but only for trading in stocks. Predicting a move in F&O is almost impossible considering the news flow from global mrkts

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PS :

JPMorgan downgrades India's IT sector performance as pandemic boom fades | Business Standard News

We all know what this means ryt frnds? :smile:

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In my limited view, the sell off is due to people thinking USA is going into recession and Europe is going through hardship due to Ukraine war and assuming that in case USA goes into recession, IT spending will decline. I feel the sell off is purely based on these two parameters. This is inspite of INR depreciating. IT sector is one sector to hide when INR depreciates to USD.

For an investor and an existing shareholder, TCS is available at 52 week low. Their order book for full year 2022 is 34.6 billion USD. I am sure to execute this many project it would take one to two years and during this time, I am sure TCS will not be twiddling their thumbs thinking of how to buy and sell sun flower seeds from Ukraine and reading JP Morgan reports, but will be getting other contracts as well. Look into the dividend distribution of TCS for the last several years. They are like Bank FD with quarterly interest payments, every quarter they give out dividends.

I am sure as far as order book is concerned, the same applies to other three IT majors.

For a investor or shareholders, this is the best opportunity to accumulate. Never seen TCS at its 52 week low value.

Disclaimer: I am invested in IT stocks and hence my views will be biased.


On weekly and monthly charts, 27300-27700ish seems good support

Let’s see how the market reacts.

Its time to start accumulating. Added ICICITECH etf today.

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