Infosys which has been pillar of many large investor portfolio since almost 2 decades, has taken a hit in last two sessions. This hit could be the Start of the End of Infosys era! On 13th April, in my post “Can INFY loose its decade old rally?” , i already warned and initiated SELL call with tgts of 920, 840 and 790 of which we have almost reached 2nd destination. Stock had been in long term consolidation of 3 years long in the range of 900-1100 and was finding out a reason to move out of the range on either side…And finally, we got…….
Resignation of Mr. Sikka has been the reason of breakout from the consolidation pattern that too on downside. With such an instance it has also given two other bearish confirmation on monthly charts which means we need to be cautious for the stock in long term portfolio.
Firstly, Stock has breached 10 year old channel on Monthly chart which is a strong sign of trend reversal as the selling has been pretty much with higher volumes than average volume. BUT still confirmation would be done if it closes below 880 this expiry.
Secondly, we have got a probable H&S breakout on monthly chart with neckline at 880 level which is exactly at the same level where we got channel breakout.
Now technically on charts, 880 is crucial level to watch for next two weeks but on other side as of now buy back price is set 1150 levels which might be revised. So when technical and fundamental is not going in same direction, we should avoid any new position unless we have clear picture of future. As a trader i would recommend shorts and as investors i am still intact with my targets of 840 and 790 which now trailing SL at 950!
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