Infosys to zoom, witnesses multi-month trendline breakout

Indian IT giant, Infosys surged as much as 3.6 per cent in intraday trade pulling the benchmark indices marginally up. Infosys, which holds 4.96 per cent weightage in Nifty50 and holds the second largest position in Nifty IT in terms of its market capitalisation pulled both Nifty and Nifty IT to trade up by 0.3 per cent and 1.2 per cent, respectively. The company had witnessed a huge disappointment due to the abrupt walk out of CEO, Vishal Sikka, but has recently welcomed Salil Parekh as its new CEO.

The stock had fallen almost 15.5 per cent in three consecutive sessions after Vishal Sikka’s exit. The stock had just given a multiple point downward sloping trendline break out before that at 1015 levels on August 17. However, the stock could not confirm the breakout on the next day and tumbled sharply. The stock gave a gradual recovery thereafter which took around three months. The stock gave a trendline and round bottom breakout at 992 levels on November 24 and yet again corrected as a pullback for five consecutive sessions.

On December 4, the stock witnessed a breakout yet again with rising volumes and 14-period RSI positive crossover at 59 levels which depicts momentum going forward. Investors holding Nifty50 in their portfolio can enjoy profits in near term from the stock.