Does the Infosys Stock Rally Have More in the Tank?
The shares have climbed rapidly the past two months. Here's what could be next.
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Infosys Ltd. INFY is an India-based leader in "next-generation digital services and consulting." The ADRs have made a strong advance over the past two months so it is natural to ask whether this can continue or is a pullback likely.
Let's check out the charts and indicators for the answer.
In the daily bar chart of INFY, below, I can see that the shares have climbed rapidly higher the past two months. INFY trades above the rising 50-day moving average line which has recently crossed above the 200-day moving average line for a bullish golden cross.
The On-Balance-Volume (OBV) line declined into late June and then turned higher in July. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In the weekly Japanese candlestick chart of INFY, below, I can see a pretty strong picture. INFY trades above the rising 40-week moving average line.
The weekly OBV line has moved in step with the price action. The MACD oscillator is in a bullish move above the zero line. The latest candle pattern is a doji and could become part of a top reversal pattern.
In this daily Point and Figure chart of INFY, below, I can see a potential upside price target in the $28 area.
In this weekly Point and Figure chart of INFY, below, I can see that prices reached and exceeded a price target in the $18 area.
Bottom-line strategy: INFY has made a strong advance and looks poised for a pause and maybe even a correction. The stock made two upside gaps in July and it would not surprise me that one or even two of these gaps are filled.
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