'These three IT stocks poised for an up move in coming days'

Since the election results, Nifty has been forming a high wave candle pattern of the range of about 430 points. Bank Nifty has followed suit with a wide range of about 1,500 points. Through RSI, the momentum indicator has moved above 60 levels, there are divergences visible on weekly and monthly charts on both indices. This could be a sign of impending weakness, especially considering that the price has formed indecisive candle patterns on weekly charts.

An analysis of price movement post election results for the last three instances reveals an interesting structure. Whenever the price has moved in a big range on the results day forming a high wave candle pattern, the subsequent price action for almost over the next three months has been restricted within this range. One can thus expect a range movement in both the indices in the ensuing quarter, with the respective highs of 12,070 and 31,780 holding good for some time now.

Also, ADX, the trend strength indicator, is sloping up at present. Once its slope begins to turn down from its current levels, that would signal an end to the current uptrend for the time being.

While a majority of the sectoral indices formed bearish price patterns last week, the stocks in the IT sector told a different story. A few stocks such as Infosys, Wipro and HCL Technologies are poised for an upmove in the coming days.