Today’s pick is [stockquote]INFY[/stockquote]. The stock has been in a down-trend since highs of Feb. However, since late August, the stock has seen a pennant formation. In the last three month period, the stock was up 2% Vs. 4% as that of Nifty’s return.
We had issued a short-term buy last month that didn’t quite pan out as we expected – the stock is basically flat since then, stuck in a narrow range.
MACD line and the signal line are moving very close to each other and are not suggesting any trend.
The GMMA long-term as well as short-term lines are running very close to each other and are not able to suggest any direction.
INFY has a historical volatility in the range of 0.2 to 0.7. The scrip’s volatility is currently towards the lower side of the range.
Analysts have quite a high expectation regarding the stock. A drift in the earnings compared to the analysts expectation might pull the stock down. The stock saw stock selling by an insider worth Rs. 1 Cr. a couple of weeks ago.
Looking at these technicals we suggest that investors keep off this scrip for the short-term. A break-out of the pennant in either direction will trigger a longer-term call.