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Abhishek Preetam has an MBA in Finance and started his career as a big-data specialist working at Janalakshmi Social Services. Abhishek is a firm believer in technical analysis and a systematic approach to investing. He develops algorithms and automated portfolio management systems that crunch... More
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  • Analysis: INFY 0 comments
    Mar 18, 2013 1:20 AM | about stocks: INFY

    Today's pick is INFY (NYSE:INFY). 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.

    (click to enlarge)

    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.

    (click to enlarge)

    INFY's average correlation with the Nifty is 0.50, which is positive. The scrip will be replicating movement of Nifty.

    (click to enlarge)

    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.

    (Source: Reuters)

    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.

    This article first appeared on Your Money@StockViz.biz.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: INFY
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