The Indian IT sector really struggled in 2025 from January to July, posting negative returns of over 20% at the index level. Having said that, the broader market worries, global issues, and growing concerns about potential US tariffs on Indian exports starting somewhere in April 2025, however, turned around the performance of the sector for the better. Off late however, the sector has started to give off some of the post April gains too.
Amid all this volatility, two stocks, Affle India and Mphasis, have stood strong. These stocks have encouraging technical indicators pointing at rewarding gains ahead, all contrary to the overall lethargy in the IT sector in general.
Let’s dig in and see where these two stocks stand from a technical stand point, and what is the potential they hold.
Affle India: Is a Bullish Breakout on the Cards?
Affle India has been one of the few top performers over the course of 2024. After falling to an intraday low at ₹1,000 in March 2024, the stock witnessed robust buying, rallying almost 88% in the period from March to December 2024. Since then, the stock witnessed a time correction. Currently, the stock has broken a daily bullish pattern above the 200-day moving average. The RSI stands in the bullish zone, further adding more weight to the case of further upside.
Key Indicators Showing a Potential Reversal in Affle
- Rounding Bottom Breakout: Affle India formed a rounded bottom from December 2024 to June 2025. The stock broke out in June, and currently, it is testing the breakout level, which is considered a bullish sign.
- 200 Day Moving Average: The trading above a 200DMA is a bullish sign, indicating that the stock is traditionally in an upward trend.
- Price action with Volume: There has been a noticeable increase in price alongside rising volume, which is typically a bullish indicator. Moreover, when the stock saw a decline earlier, volumes also decreased, indicating that the downward trend may be losing steam.
- Increasing RSI Momentum: The RSI is above 55 level with bullish divergence, further signalling the possibility of an upward price movement to be continued.
Mphasis: Testing Key Support for the Next Leg Up?
Mphasis, after a sharp 36% decline between December 2024 and April 2025 (from ₹3,238 to ₹2,045), has recently broken out of an inverted head-and-shoulders pattern. It touched an intraday high of ₹2,950 and gained 12% in a period of 15 days. The shares of Mphasis are currently testing support levels at the 200DMA and the previous breakout. The RSI is still holding in the strength zone, indicating a possibility of further upside.
Key Technical Levels Supporting Mphasis’ Reversal
- Retesting previous breakout: The stock had broken out from an inverted head-and-shoulders pattern and is now retesting the breakout level, which is considered an accumulation phase.
- 200 day SMA: The stock has been consistently taking support above the 200 SMA, even when weak sentiment has prevailed across the broad market, which signifies inherent strength.
- Volume Surge Confirming the Breakout: The price surge has been accompanied by an increase in volume, meaning strong market participation.
- RSI Chart and Price Direction: The 14-period RSI has moved above 40 and is forming a bullish hidden divergence, confirming that the stock has strong upward momentum.
Technical Strength vs. Market Headwinds: The Final Verdict
The Indian IT sector is now seeing a gradual recovery from its recent lows. The continued uncertainty about US tariffs remains a major risk, especially with the implementation of further tariffs slated for August 28, 2025. While broader IT stocks may continue to face pressures, AI stocks like Affle India and Mphasis are bullish on strong technical setups and positive demand for AI technologies.
Both these stocks, which are tapping into the AI opportunity, are displaying some excellent technical signs like bullish chart patterns, increasing RSI momentum, and important breakouts, which point toward sharp price movements. Along with the strong fundamentals, these two companies have a solid standing in the AI space and will be able to leverage the growth path of the sector from now on. These are stocks for investors to keep in mind. Watch these stocks closely and consider adding them to your watchlist, as they have interesting setups for returns in the short term.
Disclaimer
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
As per SEBI guidelines, the writer and his dependents may or may not hold the stocks/commodities/cryptos/any other assets discussed here. However, clients of Jainam Broking Limited may or may not own these securities.
Kiran Jani has over 15 years of experience as a trader and technical analyst in India’s financial markets. He is a well-known face on the business channels as Market Experts and has worked with Asit C Mehta, Kotak Commodities, and Axis Securities. Presently, he is Head of the Technical and Derivative Research Desk at Jainam Broking Limited.
Disclosure: The writer and his dependents do not hold the stocks discussed here. However, clients of Jainam Broking Limited may or may not own these securities.
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