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Infosys surged 3.5 per cent last week, breaking its three-week losing streak. The stock has been finding strong support around ₹900 since last November. This makes the bounce back move so far this month very significant. There is an early sign of a double-bottom formation. A rise to ₹1,000 or ₹1,020 will strengthen this case. So does this mean that the downtrend that has been in place since June 2016 is getting reversed? It is too early to predict a reversal as the charts are just emanating early signals at the moment. Price action in the next few weeks will need a close watch. In the near term, a rise to ₹1,000 or ₹1,020 looks likely. What the stock does after testing this key resistance will be key in determining the next move. Inability to break above ₹1,020 decisively may trigger a pull-back move to ₹950 and ₹900 once again. In such a scenario, Infosys may remain range-bound between ₹900 and ₹1,020 for some more time. On the other hand, if the stock manages to surpass ₹1,020 decisively, then the case for a trend reversal will gain momentum.
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