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We recommend a buy in HCL Technologies. From the weekly chart, we note that the stock has been on a long-term uptrend since mid-2003. However, after finding resistance around Rs 355 in May 2007, it began to decline and has been on a medium-term downtrend since then. This downtrend was arrested at the strong support level at Rs 270 in late September. Subsequently, the stock bounced up penetrating the 21-day and 50-day moving averages and is currently testing the medium-term downtrend line. The zone around Rs 270 is a key support from the long term perspective. We believe that the stock would not fall below this level in the medium term. If it does, the next support is at Rs 250. Short-term investors can buy the stock at current price levels with a stop at Rs 295. We expect the stock to break through the medium-term downtrend line and move up the band between Rs 330 and Rs 340 in the short term, with an intermittent pause at Rs 317.

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