Short-to-medium-term traders can look to buy stock on dips for a possible target above Rs 1600 in the next 2 months, suggest experts.
Infosys hit a record high of Rs 1953 on 17 January 2022, but it failed to hold on to the momentum. It hit a low of Rs 1215 on 25th April 2023 which translates into a fall of nearly 38%.
After hitting a low in April 2023, the stock has bounced back. It has been in a steady uptrend since then on the monthly charts. The April 2023 52-week low also corresponds with the 50-Month Moving Average which acted as a crucial support.
The stock is moving in line with the NiftyIT index, which was up 10% in the last 3 months compared to a similar rise seen in Infosys stock in the same period.
“Over the past twenty years, the Nifty IT index has experienced seven significant declines. It is noteworthy that six of these declines were in the range of 30% to 35%, followed by a return to an upward movement,” Kapil Shah, Technical Analyst, Emkay Global Financial Services Limited and Trainer at FinLearn Academy, said.
“The most recent decline was 32%, and it was followed by a time-wise correction. In the present context, the index has achieved a fresh breakout from a year-long consolidation patch, which is a positive development,” he said.“It appears that the Infosys stock has followed a repeated pattern of declining around 35% followed by an upward movement,” highlights Shah. Recently, this pattern has repeated itself, with the recent low being supported by the trend navigator moving average.
As long as Infosys is able to hold on to 1400 levels, bulls are likely to stay in charge and take the lead. It
In terms of price action, the stock is trading below 5-DMA but above 10,20,30,50,100 and 200-DMA on the daily charts, which is a positive sign for the bulls.
Agencies“Bulls have breached the immediate falling trendline on the monthly charts, which is a bullish continuation sign,” added Shah.
“Considering the above rationale, it seems like. a good idea to purchase the stock within the range of 1480 to 1440, with a stop loss of below 1400 on a closing basis. On the higher side, there seems to be potential for the stock to reach 1620/1660. Time horizon can be up to 2 months,” he recommends.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)