Analysis: INFY

Today’s pick is INFY INFY 3,609.00 10.20 (0.28%). The stock has been very volatile for most part of the last year. It started the year with a range bound movement between Rs.2,800 and Rs.2,900 and saw a bearish breakdown in April. The stock then fell to Rs. 2,200 levels. After spending 8 months between Rs. 2,200 and Rs. 2,600 the stock broke past the channel in January, to move towards its 52 weeks high of Rs. 3,000 levels. In the last three months, the stock moved +25% vs. a flat Nifty.

INFY Technical Analysis Chart

Oscillator RSI and CMO are currently in no-man’s land. The stock is currently trading in the middle of the Bollinger bands. Short-term technical just saw a 18X9 and 9X4 bearish cross-over.

The MACD line has bearishly penetrated the signal line, and the histogram levels are dropping to confirm the bearish move. However, the Long-term GMMA lines have been expanding as opposed to the contracting short-term lines. This is adding to the in-decisiveness about the direction of stock move.

INFY Correlation chart

INFY’s average correlation with the Nifty is 0.50, which is positive. The scrip will be replicating movement of Nifty. NIFTYBEES 812.00 9.17 (1.14%)

INFY Volatility chart

INFY has a historical volatility in the narrow range of 0.2 to 0.7. The scrip’s volatility is currently in the lower end of the range.

INFY Analysts Coverage

Analysts have a bullish outlook for the stock, the next set of earnings might make a difference in the stocks outlook.

Given the technicals, we suggest a short-term Hold. A long-term hold is also suggested if the stock holds above Rs. 2,600. Also, it is advisable to have a relaxed trailing stop-losses level to book profits in case of a sudden trend-reversal.

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