Infosys - A critical evaluation from Point and Figure Space
On backdrop of top management restructuring and Mr. Pai leaving, there has been a huge sell-off in Infosys. This stock, as indicated in one of our friendly blogs http://o-j-n.blogspot.com/2011/04/nifty-composition-weightage-and-its.html, holds 8.9% of index weightage! Therefore, quite understandably is equally utilized by both investors & traders for long-term investment and hedging. Getting a low-priced entry in these blue chips is everybody's dream. So this special edition is for evaluating whether this 9.6% sell off is worth the buy for a 8.9% index heavy-weight?
Weekly Analysis:
Daily Analysis:
Analysis:
On weekly chart we find a 45-degree BrRL has given the resistance at 3310 level after 4 months top (3520 level at Jan beginning). As per book, this is a classic case of resistance keeping in mind a long-term resistance. Before it resolves its direction, it's going to get into a consolidation triangle. Breaking on either side only will take the fresh direction.
Let's have a glance at the daily chart. Another classical case of 3:1 trend line support. Generally, a trend line gives support thrice for an ongoing trend. 4th time 95% (well intuitive figure) chances of breaking below this trendline, consolidate and resume its new trend (UP or DOWN). Here too it has broken. Still in the phase of consolidation. Trying to hold the pivot-line (Blue horizontal line - a long-term tussle zone between bulls & bears). A 45-deg line has been broken mildly with huge volume on the last day of trading. Suggesting another round of sell-off should be initiated soon.
Summary:
The stock is very near to the weekly trendline ("A trend line is the least resistance line" - WD Wyckoff). Therefore, the risk is very less. I think a buy at this point could be taken for short-term with a SL of 2920. However, long-term is very weak for the scrip.
On backdrop of top management restructuring and Mr. Pai leaving, there has been a huge sell-off in Infosys. This stock, as indicated in one of our friendly blogs http://o-j-n.blogspot.com/2011/04/nifty-composition-weightage-and-its.html, holds 8.9% of index weightage! Therefore, quite understandably is equally utilized by both investors & traders for long-term investment and hedging. Getting a low-priced entry in these blue chips is everybody's dream. So this special edition is for evaluating whether this 9.6% sell off is worth the buy for a 8.9% index heavy-weight?
Weekly Analysis:
Daily Analysis:
Analysis:
On weekly chart we find a 45-degree BrRL has given the resistance at 3310 level after 4 months top (3520 level at Jan beginning). As per book, this is a classic case of resistance keeping in mind a long-term resistance. Before it resolves its direction, it's going to get into a consolidation triangle. Breaking on either side only will take the fresh direction.
Let's have a glance at the daily chart. Another classical case of 3:1 trend line support. Generally, a trend line gives support thrice for an ongoing trend. 4th time 95% (well intuitive figure) chances of breaking below this trendline, consolidate and resume its new trend (UP or DOWN). Here too it has broken. Still in the phase of consolidation. Trying to hold the pivot-line (Blue horizontal line - a long-term tussle zone between bulls & bears). A 45-deg line has been broken mildly with huge volume on the last day of trading. Suggesting another round of sell-off should be initiated soon.
Summary:
The stock is very near to the weekly trendline ("A trend line is the least resistance line" - WD Wyckoff). Therefore, the risk is very less. I think a buy at this point could be taken for short-term with a SL of 2920. However, long-term is very weak for the scrip.
Good Work Rajib,
ReplyDeleteHope to see more stock specific posts ,preferably top 10 traded or say by weightage.
Hi Rajib,
ReplyDeleteHow r u !
In a cluster of breakhours I came here.
The chart looks very pretty.
Blog has a clean look, very appealing.
I also see this Knowledgeshare.
Wish I will find the time to read them and absorb them.
Takecare, will try visiting next break.