Nifty IT Surges 13.5% From July Low as Technical Indicators Signal Sustained Bullish Momentum

The Quick Take

• The Nifty IT index has rebounded 13.5% from its July 1 low and gained approximately 5% in a single week.
• RSI, MACD, and Relative Rotation Graph (RRG) indicators are all aligning to confirm strengthening bullish momentum.
• Sudeep Shah outlines strategic approaches for HDFC Bank and ICICI Bank following their Q1 earnings reports.
• India's tech sector recovery is outpacing broader market gains, suggesting a sector rotation into IT names.

India's Nifty IT index has staged a strong recovery, rising approximately 13.5% from its July 1 intraday low and adding around 5% in the most recent week, according to Economic Times Markets analysis by technical expert Sudeep Shah. The technical indicator alignment — with RSI, MACD, and the Relative Rotation Graph all confirming strengthening bullish momentum — suggests the recovery has broadening institutional participation rather than being driven by isolated short-covering. The Nifty IT's outperformance relative to the broader Nifty 50 signals a notable sector rotation into technology names, likely driven by a combination of attractive valuations after the prior sell-off and improving earnings visibility from Q1 FY2026 results.

The F&O Talk framing of the analysis includes actionable strategies for HDFC Bank and ICICI Bank post their Q1 earnings — two of the most heavily traded names in India's derivatives markets. HDFC Bank and ICICI Bank's Q1 results performance has been a key market driver, with corporate loan revival and NIM trajectory being the primary metrics for assessment. The combined IT and banking sector strength suggests India's equity market is currently being led by two of its highest-quality, high-market-cap sectors simultaneously, which provides a firmer foundation for the broader index recovery than if the rally was concentrated in smaller or more speculative names.

Investors should watch the Nifty IT index's continuation above key technical levels and the derivatives open interest buildup for IT names as evidence that the recovery has institutional backing rather than just technical short-covering. Q2 FY2026 revenue guidance from TCS, Infosys, and HCL Tech — expected in July — will serve as the fundamental catalyst that validates or challenges the technical breakout. The critical macro variable is the trajectory of US tech sector earnings: as India's IT sector derives 60%+ of revenues from US clients, the IBM guidance cut and broader enterprise IT spending signals directly affect the forward earnings expectations that underpin Nifty IT's valuation recovery.

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