Technical Analysis

Infosys in a medium-term uptrend

Yoganand D | Updated on September 29, 2019 Published on September 29, 2019

A break above ₹847 can take the stock up to ₹900 in the long run

Here are answers to readers’ queries on the performance of their stock holdings.

I bought shares of Infosys at ₹726 and IGL at ₹303. I want to stay invested for long term.

Mukesh Jain

Infosys (₹782.3): The stock of Infosys has been in a long-term uptrend since taking support at ₹430 in August 2017.

 

While trending up, the stock had conclusively breached a key long-term resistance at ₹640 in mid-2018, which subsequently turned into a significant support level. Intermediate as well as the medium-term trends are up for the stock. However, the short-term trend has been down since registering a new high at ₹847 in early September. The stock is currently volatile with a downward bias. A strong fall below the key support level of ₹760 can drag the stock down to ₹730 and ₹700 levels.

An emphatic tumble below ₹700 will mar the medium-term uptrend and drag the stock to the vital long-term support between ₹640 and ₹650.

Investors with a long-term perspective can stay invested with a stop-loss at ₹610 levels. Only a decisive fall below ₹640 will mitigate the long-term uptrend. Next support levels are at ₹600 and ₹550.

On the upside, a conclusive rally above the immediate resistance at ₹800 will take the stock higher to ₹820 and ₹847 levels.

A further break above ₹847 can take the stock up to ₹900 in the long run. You can consider accumulating the stock in declines with a long-term stop-loss at ₹610.

Indraprastha Gas (₹347.1): In October 2018, the stock of Indraprastha Gas (IGL) took support at ₹215 and bottomed out. After that, it has been on a long-term uptrend. Medium- and short-term trends are up for the stock. But it is now testing a significant long-term resistance at ₹350. Also, it experiences selling pressure at higher levels.

Therefore, a short-term corrective decline can’t be ruled out at this juncture. The stock can decline to ₹325. A further fall below this base will mar the short-term uptrend and drag it lower to ₹300 over the medium term. Next key support is at ₹270. Being a long-term investor, you can consider averaging in declines with a stop-loss at ₹255 levels.

A break above ₹350 can take the stock up to ₹370. Further rally beyond ₹370 can pave way for an up-move to ₹400 in the long term.

That said, an emphatic fall below ₹270 will diminish the uptrend and drag the stock down to ₹250 and then to ₹220 levels in the long run. However, such a break below ₹270 appears unlikely at this juncture.

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Published on September 29, 2019
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