Coforge Limited, Oversold after Q4 result. CEO made a big statement !!

After the announcement of Q4 numbers, Coforge Limited showing oversold sign on daily timeframe chart. IT sector is going through tough time when it comes to stock price movement for all the IT companies in India. After some of the big IT companies came up with their Q4 numbers, we saw that investors were not interested in making fresh positions.

Though we saw some recovery in IT companies in US after the announcement of earnings by big IT giants like Google, alphabet & Apple, but the same recovery has yet not been passed to Indian IT firms. Most of our Indian IT firms have their business dependency outside India, hence currency movement also change the sentiments around IT firm stock price. We are seeing three sector IT, FMCG and Cement are facing price pressure in the last few weeks.

Coforge has also done an acquisition which its investors have not appreciated and stock price was down by more than 9% on Friday. Company CEO when came in front of media explained the media that the acquisition will going to be a game changer for Coforge, but his statement could not give positive boost to the investors, one more reason that Coforge stock price was not able to recover because company did not give any future business forecast except forecast of becoming a 2 billion dollar company in two years. Which is a very foresighted forecast for investor who are willing to look for a return in an year time horizon.

What can I help Coforge stock price now !!

1. It is oversold so some recovery can come.
2. It has broken its support level which is a bearish sign but often we see that stocks will break their very important support level out of some sales pressure tend to recover and regain to the minimum point where support level lies.
3. IT firm in US have recovered. Hence we can also see some recovery in Indian IT firms.
4. US Fed & Indian RBI can cut rates in the second half of the year that can bring liquidity to the IT firm for new projects. Hence lot of outsourcing project can be passed to Indian IT firms for them to gain fresh orders and to gain revenue. Hence increase profitability.
5. With this election season if the previous government would come back in power, their Moto of going digital will surely boost sentimental as well as business opportunities towards the Indian IT firm and the dependency on the global scale should also dilute because local order share should increase but this is a foresighted approach.
6. If the market would rotate the sector in which generally market focus some of the sectors like IT,FMCG and cement could become the new focus area for the big fund managers hence can bring focus and fund flow towards these beaten down stocks. Then we can see a rally but again its a hypothetical thought.

Disclaimer:- Views presented here are author personal opinion, hence use your own judgement for making position.