Contrary to expectation and following the pre-announcement slump, Infosys surprisingly surged today after its quarter end results were announced. Infosys has risen by over 6% at the day’s early trade when the earning announcement came about much better than it had been expected. The consolidated growth in net profit of the company compared quarter on quarter had jumped by approximately 9.7% which comes to Rs.1906 crore for quarter ending September 2011. This led to rise in the stock prices to about Rs. 2664, a 6.3% rise after yesterday’s closing on the Sensex.
The stock had tumbled by over 3% yesterday as profit bookings and negative sentiments prevailing in the global market.Technical analysts predict a target of Rs. 2775-80 because present rise has broken the resistance of the inverse head shoulder pattern. Even past trends followed on a daily basis had shown an uptrend in the stock movements for the previous month. The support that the stock should find if it falls lies at Rs.2500 levels.
If one were to look at the RSI and the MACD, the momentum of the stock is aggressive and makes it fall within the positive boundaries. This makes anticipations of a positive rally for the following trading sessions stronger.
‘Bell the Bull’ says that if the stock falls within the Rs.2450 levels soon and holds on to it for a while, the downward risk can be said to have eliminated. Thus a clear buy signal shall be evident for the prospective investors. For others, a buy on every fall with limited profit booking targets should be a decent strategy.