Technical question: How far can Infosys fall?

What are the technical prospects for the share in Infosys?

Mohammed Hanif

Infosys (INR1,503.35): The stock has been stuck in a sideways range of INR 1,650 and INR 1,950 since September 2021. It broke this range on the downside last month and has been declining since then. The current trend is declining. Immediate support is at INR 1,491 – 21-month moving average. If the stock manages to jump from here, it may meet resistance at ₹ 1,600 and ₹ 1,650. As such, the upside is likely to be limited to ₹ 1,600- ₹ 1,650 at present. A break below ₹ 1,491 could pull Infosys down to ₹ 1,400 – 38.2 percent Fibonacci retracement support level.

Whether the stock manages to jump from ₹ 1,400 or not will be very crucial. A bounce from INR 1,400 can take Infosys up to INR 1,600. It can also be an initial sign of a trend reversal. However, the stock needs to rise above INR 1,650 to confirm a trend reversal. If Infosys goes below 1,400 INR, a much steeper drop can be seen to 1,250 INR-1,200. If you intend to buy the stock, you should wait. See if the stock jumps back from INR 1,400 or extends the fall to INR 1,200, then decide accordingly. So far, one can stay out of this stock.

I have bought shares in REC for 120.5 INR. Can I keep it for 6 months? What are the prospects?


REC (114.05 INR): The current trend is declining. From a larger picture, the REC stock has been broadly tense between 70 INR and 225 INR for more than a decade now. Within this trend, it peaked at INR 168.7 in October and has fallen since then. Strong resistance is now in the ₹ 130- ₹ 135 region. Chances are high that the stock will fall towards ₹80 over the next two to three months. Then a new convention can begin anywhere from the ₹80- ₹70 region, which can take the REC up to ₹170 again.

A strong break above 170 INR will then bring the stock up to 200 INR-220 – the upper end of the long-term range. You can leave the stock with a minimum of losses now. Wait until the fall and buy the stock again at 83 INR. Collect more for 76 INR. Hold a stop-loss of 67 INR. Move stop-loss up to 90 INR as soon as the stock moves up to 140 INR. Order e.g. partial profit for 40 percent of your inventory to 168 INR. Then move the stop loss for the rest of the inventory to 125 INR. Finish the rest at 210 INR.

I own shares in Mahanagar Gas. Should I leave the stock and post losses now, or should I wait?

Indraeel Mukherjee

Mahanagar Gas (INR 740.95): The stock is under pressure. The rejection from February’s lowest value of INR680.2 did not break the INR 800 decisively. The stock peaked at INR 862 in April and has fallen sharply again.

A very crucial support level is at 670 INR. If the stock manages to maintain above this support, a new rise to ₹ 1,150- ₹ 1,200 is possible in the long run. But if it breaks below 670 INR, a steeper drop to 510-500 INR is possible. Since you have not mentioned your purchase prices, it becomes difficult to advise. If you have a risk appetite to digest more losses, hold the stock with a stop-loss of ₹ 640. Buy more when the stock drops to 680 INR. If the stock starts to rise from 670 INR, move the stop-loss up to 780 INR as soon as the price gets above 880 INR. Move the stop-load further up to 1,020 INR. when the stock reaches 1,100 INR. Exit at 1,180 INR.

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Published on

May 14, 2022

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