Infosys – INFY
Interesting price action on Infosys – INFY. It’s definitely one to keep on your watch list.
Let me walk through the chart…. Point A is the cup that started in mid-February (before the big drop at the end of the month. Market leading stocks can lead up and down.) Wait for a handle to form somewhere around Point B. To make it actionable, look for a pullback on light volume with a possible buy point at the peak of the handle.
Points C, D, & E point to where the stock found support at moving averages. At “C” the stock fell along with the rest of the market, but found support at two days at the 200 day moving average. I think of the 200 day average as the last line in the sand. Institutions will pick up ‘bargains’ that have drifted to the 200 day line. However, if the stock repeated breaks below the 200 day line, look out.
Points D&E are the 50 day line and 21 day line respectively. Note in July the stock resumed its uptrend and finds support (buyers) around the 21 day line. Aaron Task of thestreet.com suggests that a 21 day average is popular among hedge funds.
As the INFY rally gets a little long in the tooth in November, the stock starts to rest on the 50 day avg., before starting the latest base.
