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HCL Technologies Ltd.
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  • News
  • Financials
  • Technicals
  • Peers
  • Shareholdings
  • MF
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  • About

HCL Technologies Ltd.

  • 929.2513.25 (1.45%)
  • Closed
  • As On: 04:02 PM IST
OPEN TRADING A/C
  • Open925.90
  • High934.05
  • Low922.15
  • Prev Close916.00
  • Volume62,34,947
  • VWAP(₹)929.62
  • Employee cost

    In FY-20, 49.4 percent of the revenue was spent on employee benefits, which was an increase of 90 basis points from the level of 48.5 per cent in FY-19.
  • US localization - Done and dusted

    With 17,920 employees, the company has achieved 67.1 per cent localisation in the US, so the risk of any regulatory change over the employment policy will not have any major impact on the company
  • Currency current

    Ninety seven per cent of its revenues is realised in foreign currencies and 74 per cent of the expenditure is in foreign currency. There is little scope for sudden currency gains after taking into account hedging costs.
  • Revenue mix

    Financial service vertical constitutes 22.1 percent, while manufacturing contributes 17.7 percent to the company’s business. Higher focus on digitization in the manufacturing sector is an opportunity for the company, as IT spends by this sector is likely to spike in the near term.

Found Insights useful?

Key Metrics

  • PE Ratio(x)19.08
  • EPS - TTM(₹)48.70
  • MCap(₹ Cr.)2,52,859
  • MCap Rank3
  • PB Ratio(x)4.83
  • Div Yield(%)1.08
  • Face Value(₹)2.00
  • 52W High(₹)1,067.00
  • 52W Low(₹)375.25
  • MCap/Sales1.68
  • Beta(1 Month)0.86
  • BV/Share(₹)189.49

Returns

  • 1 Day1.45%
  • 1 Month-1.93%
  • 3 Months12.68%
  • 1 Year59.54%
  • 3 Years94.49%
  • 5 Years129.8%

HCL Tech Recommendations

  • Target₹1300
  • OrganizationMotilal Oswal Financial Services
  • BUY

Financials

    • Covid test result - Positive

      There is no doubt that the COVID-19 pandemic, the resulting disruption of the world economy and the social upheavals of early 2020 have battered some industries. But the demand for digital technology has continued to be strong. And while there have been delays in some engagements and short term economic slowdowns, there appear to be tremendous opportunities for technology companies to grow in the medium and long term.

    • SaaS - the new oxygen

      We also saw exceptional traction with our solutions in the SaaS-based CRM (Customer Relationship Management), HCM (Human Capital Management), and SCM (Supply Chain Management) spaces, with demand for the former two doubling last year. We expect this trend to continue this year.

    • Geo-political risk in new world order

      All of these geopolitical parameters have a direct impact on HCL business as we operate in 40+ countries. Current political views create perception challenges for winning business for a foreign owned entity. Legislation which restricts the availability of work visas for skilled resources impacts our ability to deliver services which include project delays and increase cost.

  • Dec 2020Sep 2020Jun 2020Mar 2020Dec 2019
    Total Income19,491.0018,793.0018,137.0018,734.0018,292.00
    Total Income Growth (%)3.713.62-3.192.423.76
    Total Expenses14,865.0014,568.0014,150.0014,725.0014,448.00
    Total Expenses Growth (%)2.042.95-3.901.923.09
    EBIT4,626.004,225.003,987.004,009.003,844.00
    EBIT Growth (%)9.495.97-0.554.296.36
    Profit after Tax (PAT)3,969.003,143.002,931.003,172.002,944.00
    PAT Growth (%)26.287.23-7.607.748.59
    EBIT Margin (%)23.7322.4821.9821.4021.01
    Net Profit Margin (%)20.3616.7216.1616.9316.09
    Basic EPS (₹)14.6311.5810.8011.6710.85
    Dec 2020Sep 2020Jun 2020Mar 2020Dec 2019
    Total Income9,622.008,839.008,678.009,215.008,781.00
    Total Income Growth (%)8.861.86-5.834.946.79
    Total Expenses5,916.005,578.005,537.006,078.005,718.00
    Total Expenses Growth (%)6.060.74-8.906.306.84
    EBIT3,706.003,261.003,141.003,137.003,063.00
    EBIT Growth (%)13.653.820.132.426.69
    Profit after Tax (PAT)3,397.002,530.002,360.002,500.002,444.00
    PAT Growth (%)34.277.20-5.602.299.50
    EBIT Margin (%)38.5236.8936.1934.0434.88
    Net Profit Margin (%)35.3028.6227.2027.1327.83
    Basic EPS (₹)12.529.328.709.209.01
    FY 2020FY 2019FY 2018FY 2017FY 2016
    Total Revenue71,265.0061,370.0051,786.0048,641.0032,002.07
    Total Revenue Growth (%)16.1218.516.4751.99-15.43
    Total Expenses57,285.0048,748.0040,775.0038,101.0024,966.15
    Total Expenses Growth (%)17.5119.557.0252.61-13.08
    Profit after Tax (PAT)11,057.0010,120.008,721.008,606.005,602.43
    PAT Growth (%)9.2616.041.3453.61-23.43
    Operating Profit Margin (%)20.4921.1721.9122.3422.83
    Net Profit Margin (%)15.6416.7417.2418.0917.99
    Basic EPS (₹)40.7573.5862.2360.3339.79
    FY 2020FY 2019FY 2018FY 2017FY 2016
    Total Revenue33,193.0026,817.0022,775.0020,274.0014,403.06
    Total Revenue Growth (%)23.7817.7512.3440.76-21.52
    Total Expenses22,016.0016,886.0013,650.0011,998.008,621.51
    Total Expenses Growth (%)30.3823.7113.7739.16-19.08
    Profit after Tax (PAT)8,969.008,185.007,362.006,873.004,719.08
    PAT Growth (%)9.5811.187.1145.64-25.64
    Operating Profit Margin (%)35.0038.2441.4443.1243.37
    Net Profit Margin (%)27.5031.4633.3535.5735.12
    Basic EPS (₹)33.0659.6952.5448.1833.52

    All figures in Rs Cr, unless mentioned otherwise

    Insights
    • Beating 3 Yr Revenue CAGR

      Company's annual revenue growth of 16.12% outperformed its 3 year CAGR of 13.43%. (Source: Consolidated Financials)
    • Employee & Interest Expense

      Company has spent less than 1% of its operating revenues towards interest expenses and 49.42% towards employee cost in the year ending Mar 31, 2020. (Source: Consolidated Financials)
  • AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Total Assets82,906.0058,575.0048,023.0045,762.0039,340.60
    Total Assets Growth (%)41.5421.974.9416.3211.62
    Total Liabilities31,485.0017,106.0011,637.0012,640.0011,739.17
    Total Liabilities Growth (%)84.0647.00-7.947.677.32
    Total Equity51,421.0041,469.0036,386.0033,122.0027,601.43
    Total Equity Growth (%)24.0013.979.8520.0013.56
    Current Ratio (x)1.622.422.432.332.54
    Total Debt to Equity (x)0.090.090.010.010.03
    Contingent Liabilities702.00476.000.000.00372.07
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Total Assets53,515.0037,456.0032,818.0032,371.0026,588.04
    Total Assets Growth (%)42.8714.131.3821.756.71
    Total Liabilities16,219.007,017.005,255.006,398.005,091.47
    Total Liabilities Growth (%)131.1433.53-17.8625.66-7.58
    Total Equity37,296.0030,439.0027,563.0025,973.0021,496.57
    Total Equity Growth (%)22.5310.436.1220.8210.77
    Current Ratio (x)1.692.933.293.063.91
    Total Debt to Equity (x)0.000.000.000.000.00
    Contingent Liabilities318.00263.00202.00408.00259.91

    All figures in Rs Cr, unless mentioned otherwise

  • AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Net Cash flow from Operating Activities13,359.008,971.008,328.008,995.003,822.62
    Net Cash used in Investing Activities-12,374.00-3,073.00-2,283.00-3,833.00-2,188.70
    Net Cash flow from Financing Activities-3,168.00-1,462.00-5,714.00-4,517.00-2,237.09
    Net Cash Flow-2,141.004,235.00378.00588.00-622.90
    Closing Cash & Cash Equivalent3,760.005,934.001,699.001,321.00732.91
    Closing Cash & Cash Equivalent Growth (%)-36.64249.2628.6180.24-45.24
    Total Debt/ CFO (x)0.350.410.050.050.25
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Net Cash flow from Operating Activities9,855.008,676.006,339.006,995.003,154.30
    Net Cash used in Investing Activities-11,091.00995.00-973.00-2,643.00-770.52
    Net Cash flow from Financing Activities-1,988.00-5,335.00-5,547.00-4,112.00-2,698.98
    Net Cash Flow-3,232.004,313.00-142.00227.00-307.56
    Closing Cash & Cash Equivalent1,291.004,523.00210.00352.00125.17
    Closing Cash & Cash Equivalent Growth (%)-71.462,053.81-40.34181.22-71.07
    Total Debt/ CFO (x)0.020.000.010.000.01

    All figures in Rs Cr, unless mentioned otherwise

    Insights
    • Increase in Cash from Investing

      Company has used Rs 12374.0 cr for investing activities which is an YoY increase of 302.67%. (Source: Consolidated Financials)
  • AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Return on Equity (%)21.5624.4623.9626.1120.45
    Return on Capital Employed (%)24.4727.6529.2230.8724.09
    Return on Assets (%)13.3317.2718.1618.8014.24
    Interest Coverage Ratio (x)28.6873.54160.58119.4396.21
    Asset Turnover Ratio (x)85.24103.16105.30103.9479.14
    Price to Earnings (x)10.7314.5815.4614.4720.53
    Price to Book (x)2.313.563.703.784.19
    EV/EBITDA (x)6.629.6410.5210.1214.18
    EBITDA Margin (%)25.3324.6024.6424.0824.15
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Return on Equity (%)24.0426.8826.7026.4621.95
    Return on Capital Employed (%)28.8432.0032.5231.4926.39
    Return on Assets (%)16.7521.8522.4321.2317.74
    Interest Coverage Ratio (x)47.96621.69397.74151.47127.18
    Asset Turnover Ratio (x)60.9269.4467.2559.6750.52
    Price to Earnings (x)13.2318.0218.3218.1224.39
    Price to Book (x)3.184.844.894.795.34
    EV/EBITDA (x)8.7912.5813.1913.2217.40
    EBITDA Margin (%)40.9943.1445.4845.5945.43

Found Financials useful?

Technicals

  • Stochastic Crossover

    Bullish signal on weekly chart

    Appeared on: 19 Feb 2021

    Region: Equlibrium

    Last Signal 4 Dec 2020 (Gain 16.89%)

    Average price gain of 6.60% within 7 weeks of Bullish signal in last 10 years

  • 47%
    Positive Movement
    since 1st Jan 2005
    on basis
    52%
    Negative Movement
    since 1st Jan 2005
    on basis
    Exclude

    Global Meltdown1st Jan 2008 to 10th Nov 2008

    Covid Crisis1st Feb 2020 to 31st Mar 2020

  • R1936.65Pivot

    929.40

    S1924.75
    R2941.30S2917.50
    R3953.20S3905.60
  • 5 Days14 Days28 Days
    20.6724.3725.83

Found Technicals useful?

Peers

  • NAMEP/E (x)P/B (x)ROE %ROCE %ROA %Rev CAGR [3Yr]OPMNPMBasic EPSCurrent RatioTotal Debt/ Equity (x)Total Debt/ CFO (x)
    HCL Tech19.084.9021.5624.4713.3313.4320.4915.6440.751.620.090.35
    TCS35.9913.2638.4446.0026.749.6527.5020.6786.193.330.000.00
    Infosys29.198.2525.3530.8317.889.2624.4218.3238.972.620.000.00
    Wipro22.744.1617.5721.7611.963.1921.2315.9716.672.400.110.58
    Tech Mahindra22.323.9518.4819.8810.798.2714.2510.5846.212.120.110.56
    Add More
    Annual Ratios (%)

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      Insights
      • Stock Returns vs Nifty 100

        Stock gave a 3 year return of 91.71% as compared to Nifty 100 which gave a return of 36.33%. (as of last trading session)
      • Stock Returns vs Nifty IT

        Stock generated 91.71% return as compared to Nifty IT which gave investors 92.42% return over 3 year time period. (as of last trading session)

      Found Peer Comparison useful?

      Shareholding Patterns

      • CategoryNo. of SharesPercentage% Change QoQ
        Promoters1,63,71,90,27460.33 %0.00
        Pledge00.00 %0.00
        FII67,63,71,08824.92 %0.00
        DII27,80,32,68810.24 %-0.37
        MF17,92,15,6906.60 %0.63
        Others12,20,71,0464.51 %0.37
      • Category31 Dec 202030 Sep 202030 Jun 202031 Mar 2020
        Promoters60.3360.3360.3360.33
        Pledge0.000.000.000.00
        FII24.9224.9225.6226.42
        DII10.2410.6110.009.13
        Mutual Funds6.605.975.865.45
        Others4.514.144.054.12

      Mutual Funds Ownership

      MF Ownership as on 31 January 2021

      • Equity: Large Cap
        • 1,492.24

          Amount Invested (in Cr.)

        • 1.69%

          % of AUM

        • 1.40

          % Change (MoM basis)

      • Equity: Large Cap
        3
        • 1,201.73

          Amount Invested (in Cr.)

        • 4.84%

          % of AUM

        • 0.00

          % Change (MoM basis)

      • Hybrid: Aggressive Hybrid
        4
        • 822.60

          Amount Invested (in Cr.)

        • 2.37%

          % of AUM

        • 0.00

          % Change (MoM basis)

      Futures & Options

        • Type
        • Expiry Month
        • Strike Price
        DatePrice

        27-09-2020Current

        0.00-327.55 (-100.00%)

        0.00
        Open
        0.00
        High
        0.00
        Low
        327.55
        Close
        0
        Contracts Traded
        0.00
        Turnover (₹ Lakhs)
        • Expiry Month
        DatePrice

        27-09-2020Current

        927.5010.40 (1.13%)

        924.25
        Open
        933.60
        High
        922.00
        Low
        917.10
        Prev Close
        5,779
        Contracts Traded
        37,601.06
        Turnover (₹ Lakhs)

      Corporate Actions

      • Board Meeting

        Quarterly Results & Interim Dividend

        Dec 17, 2020

        Board Meeting

        Quarterly Results & 2nd Interim Dividend

        Sep 28, 2020

        Interim Dividend

        200%

        Sep 28, 2020

      • Announced onMeeting on
        Dec 17, 2020Jan 15, 2021
        Quarterly Results & Interim Dividend
        Sep 28, 2020Oct 16, 2020
        Quarterly Results & 2nd Interim Dividend
        Jul 03, 2020Jul 17, 2020
        Quarterly Results & Interim Dividend
        Apr 23, 2020May 07, 2020
        Audited Results & Final Dividend
        Dec 20, 2019Jan 17, 2020
        Quarterly Results & Interim Dividend
      • Announced onEx-DateDividend%
        Sep 28, 2020Oct 22, 2020200%
        May 07, 2020Sep 14, 2020100%
        Jul 03, 2020Jul 23, 2020100%
        Dec 20, 2019Jan 24, 2020100%
        Sep 30, 2019Oct 31, 2019100%
      • Announced onEx-Date
        Oct 23, 2019Dec 05, 2019
        Bonus Ratio: 1 share(s) for every 1 shares held
        Jan 30, 2015Mar 19, 2015
        Bonus Ratio: 1 share(s) for every 1 shares held
        Dec 14, 2006Mar 15, 2007
        Bonus Ratio: 1 share(s) for every 1 shares held
      • Announced onEx-Date
        Oct 24, 2000Nov 27, 2000
        Split: Old FV4.0| New FV:2.0
      • No Data Available

      • Announced onMeeting on
        Sep 07, 2020Sep 29, 2020
        -
        Aug 22, 2019Sep 21, 2019
        -
        Jul 12, 2019Aug 06, 2019
        Book closure from Jul 31, 2019 to Aug 2, 2019
        Aug 21, 2018Sep 18, 2018
        Book closure from Sep 12, 2018 to Sep 14, 2018
        Aug 20, 2018-
        Buy Back of Shares

      About

      HCL Technologies Ltd., incorporated in the year 1991, is a Large Cap company (having a market cap of Rs 252,167.33 Crore) operating in IT Software sector.

      HCL Technologies Ltd. key Products/Revenue Segments include Software Development Charges and Computer Hardware & Software for the year ending 31-Mar-2020.

      For the quarter ended 31-12-2020, the company has reported a Consolidated Total Income of Rs 19,491.00 Crore, up 3.71 % from last quarter Total Income of Rs 18,793.00 Crore and up 6.55 % from last year same quarter Total Income of Rs 18,292.00 Crore. Company has reported net profit after tax of Rs 3,977.00 Crore in latest quarter.

      The company’s top management includes Ms.Roshni Nadar Malhotra, Dr.Mohan Chellappa, Mr.Deepak Kapoor, Ms.Nishi Vasudeva, Mr.Thomas Sieber, Mr.Subramanian Madhavan, Dr.Sosale Shankara Sastry, Ms.Robin Abrams, Mr.R Srinivasan, Mr.Shikhar Malhotra, Mr.Shiv Nadar, Mr.Simon England. Company has B S R & Co. LLP as its auditors. As on 31-12-2020, the company has a total of 271.37 Crore shares outstanding.

      About HCL Tech

      HCL Technologies Ltd., incorporated in the year 1991, is a Large Cap company (having a market cap of Rs 252,167.33 Crore) operating in IT Software sector. Show More

      Key Indices Listed On

      Nifty 50, S&P BSE Sensex, Nifty IT, Nifty 100, Nifty 200

      Address

      806, Siddharth,96, Nehru Place,New Delhi, Delhi - 110019

      Executive Leadership

      AK

      Ajit Kumar

      President
      AR

      Amit Roy

      Executive Vice President
      AC

      Anil Chanana

      Chief Financial Officer
      CV

      C Vijayakumar

      President & CEO
      Show More

      Auditors

      B S R & Co. LLP

      HCL Tech Share Price Update

      HCL Technologies Ltd. share price moved up by 1.45% from its previous close of Rs 916.00. HCL Technologies Ltd. stock last traded price is 929.25

      Share PriceValue
      Today/Current/Last929.25
      Previous Day916.00

      DATA SOURCES: TickerPlant (for live BSE/NSE quotes service) and Dion Global Solutions Ltd. (for corporate data, historical price & volume, F&O data). Sensex & BSE Quotes and Nifty & NSE Quotes are real-time and licensed from BSE and NSE respectively. All timestamps are reflected in IST (Indian Standard Time).

      DISCLAIMER: Any and all content on this website including tools/analysis is provided to you only for convenience and on an “as-is, as- available” basis without representation and warranties of any kind. The content and any output of such tools/analysis is for informational purposes only and should not be relied upon or construed as an investment advice or guarantee for any specific performance/returns advice or considered as recommendation for the purchase or sale of any security or investment. You are advised to exercise caution, discretion and independent judgment with regards to the same and seek advice from professionals and certified experts before taking any decisions.

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      Markets Data

      *

      Key Metrics

      • This is a ratio arrived at by dividing the current market price of a stock by its latest (annual or annualized) earnings per share. Here we have taken the TTM (trailing twelve months) adjusted earnings per share.

      • Earnings per share (TTM) tells the profit after tax earned on a per share basis by a stock over the last twelve months or four quarters.

      • MCap or Market capitalization of a stock is calculated by multiplying the total number of shares outstanding of that particular stock with its current market price.

      • This is the ranking of a company within its sector based on MCap or Market capitalization. Higher the market capitalization of a company, higher the rank it is assigned.

      • Price to Book represents the ratio of current market price of a stock to its book value per share. The book value itself is arrived at by dividing the net worth of a company by the total number of shares outstanding of the company at that time.

      • Dividend Yield calculates the amount of full year dividend declared by a company as a percentage of the current market price of a stock. All other things being equal, higher the dividend yield of the stock, the better it is for investors.

      • Face value of a stock is the value ascribed to the stock as per the balance sheet of the company. The dividend declared by a company is usually declared as a percentage of face value.

      • Beta (β) is a measure of systematic risk. It describes the responsiveness of a stock to fluctuations in the market. Beta coefficient of more than 1 denotes that a security is more volatile than its benchmark and less than 0 signifies that security return is not correlated to market movement.

      • Volume Weighted Average Price represents the average price of a security over a particular time period (example one trading day) weighted by the volume traded at each price point.

      • This represents the 52 week high and low price of the security. It is also the 1 year high and low of the security. This represents the highest and lowest price touched by the security during the past 52 weeks or 1 year including today.

      • Book value represents the value arrived at by subtracting the total liabilities from the total assets of the company. On dividing this value with the total number of shares outstanding for the company, we can arrive at book value per share. Book value is also known as Net Asset Value of a company.

      • This is a ratio of market capitalisation of a company’s stock to its annual sales. The market capitalization here is taken for the fully paid-up equity share of the company.

      Technicals

      • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

        Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

        Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

        Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      • Pivot points are indicative support and resistance levels which are calculated on basis of previous day’s high, low and closing prices. Pivot level for Monday’s trade would be based on Friday’s prices and Monday’s, high, low and close price would go into calculation of pivot levels for Tuesday’s trading session.

        There are two underlying assumptions in pivot points. First, the specific price level indicated by R1, R2 and R3 may act as a barrier or resistance in an uptrend. So, if a stock moves up above these pivots levels, the uptrend gets confirmed. Second these specific price levels may see an increased activity, hence may be used as levels to book profit by traders with a long positions. For traders with short position, these points are often helpful in determining what should be the stop loss for a trade.

        Similarly, in case of support levels as indicated by S1, S2 and S3, they may act as price level where a stock might get a breather when it is slipping southward. In case these supports levels are broken it is a confirmation of a down trend. The stock may also see increased activity close to pivot levels. They may be used by trader may use them to put stop loss for a long trade. If a trader has short position, the pivot level may help in determine a level, where profit may be booked.

        Like any other technical indicator, pivots levels cannot and should not be used as single factor while taking a trading decision. They should be combined with other technical indicators. It could be short term moving averages, stochastic, moving average convergence divergence (MACD) or overbought level as indicated by relative strength index (RSI). For example, if a breakdown of support level (S1, S2 or S3) is accompanied with stock price also moving below its short term moving average or stochastic on daily charts giving a sell signal, it would add to weightage to the decision of taking a short trade.