KPIT Tech, Firstsource: What to do with these two battered IT stocks?

Midcap IT stocks are back in the spotlight, with market expert Vishnu Kant Upadhyay arguing that battered names such as KPIT Technologies Ltd and Firstsource Solutions Ltd may have some room to recover as sentiment improves across the sector.

For traders sitting on losses, the message was clear: this may not be the time to panic exit. Instead, the focus is shifting to technical recovery signals, sector momentum and disciplined risk management.

KPIT Tech: Exit not advisable yet

On KPIT Tech, the AVP Research Advisory for Technicals and Derivatives at Master Capital Services said the stock’s recent weakness should be viewed in the context of a broader revival in IT counters, particularly in the midcap space.

“These are not the levels where one can get exit from the market,” he said, adding that the KPIT Tech stock has now regained its 21-day exponential moving average in the latest session.

Upadhyay said traders could consider averaging the stock at current levels, with Rs 750-790 seen as the zone where some profit-booking may emerge. He advised a stop-loss below Rs 540 and hold the positions.

Firstsource signals reversal pattern

Upadhyay struck a similarly tone on Firstsource Solutions, even for an trader already sitting on an 18 per cent loss. He said the stock is “forming the Inverse Head and Shoulder pattern,” a widely tracked bullish reversal formation in technical analysis.

While he cautioned that the 200-day exponential moving average remains a “very stiff resistance,” he added that momentum from lower levels suggests that barrier could soon be overcome. His upside levels for the stock stand at Rs 320 and Rs 340, with a stop-loss below Rs 246.

Sector tailwinds strengthen the case

The bullishness is not stock-specific alone. The broader backdrop for IT has improved meaningfully, with the Nifty IT index leading the market and several midcap technology names seeing sharp gains. That sector-wide strength, according to Upadhyay, creates a supportive setup for beaten-down counters attempting a rebound.

In that sense, KPIT Tech’s recovery call is also a play on improving risk appetite in technology stocks. After a difficult stretch for IT, traders appear to be rewarding names where charts are stabilising and downside pressure is easing.