Infosys rallies over 7% post Q2 results but it was predictable using “Technical analysis”

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Infosys rallies over 7% post Q2 results; hits highest level since Jan 2011. 

Infosys Ltd rallied a little over 7 per cent in morning trade on Friday to touch its highest level since January 2011 of Rs 3,360, after the software exporter raised the lower-end of its fiscal 2014 dollar revenue growth guidance.

For many trading on Infosys might be a wild guess on result day as the stock has moved previously anywhere from -15% to +15% after the results were declared. But using technical analsysis and Elliott wave concept it is possible to determine the direction and targets for the stock.

In today’s morning report also we mentioned that

“We are expecting Infosys to give an upside move towards 3500 levels given the fact that it has managed to sustain above the 3000 strong resistance level which will now be a very important support. Infosys result day iseverytime eventful with more than 10% movement but this time we are expecting this stock to show relatively non euphoric movement and prices can move in a range of + 5% to 7%.” Infosys is currently up by 5% and touched 7% high levels exactly within the range.

We did not use any fundamental values to predict this but just stock price and our tool of Elliott wave analysis. Read below, we have published on 9^th October the below chart of Infosys along with upside targets and justification in our daily research “The Financial Waves Short term update”.

Infosys Weekly chart:

 Infosys Daily chart:

Wave Analysis:

The following was published on 9^th October morning report: As shown in weekly chart of Infosys, prices started uptrend from 1000 levels in start of 2009 and moved higher till 3500 in the end of 2010. After that stock started moving in the range of 3000 and 2050 since 2011. Recently, we have witnessed that the stock has managed to cross above 3000 level and is sustaining there. ………..looking at the wave perspective there is a possibility that we might see sucha move on upside.

As shown on the daily and 120 mins chart, after sharp move from 2150 to 3100 prices are moving in a sideways consolidation over past few days which seems to be wave iv. The current up move looks impulsive with 1 leg pending on upside.

Option strategy:From option trading perspective, many traders have been buying out of money calls and puts for this stock in anticipation for large moves on result day. However, looking at the option premium for both calls and puts we have our doubts how beneficial this strategy would be just in case results and forecasts come in lines with expectations that will drastically reduce the option value.

In short, our bias on Infosys is positive and we can expect a move towards 3400 in form of wave v.

All of the above was published 2 days back i.e. in morning research of 9^th October. This is a proof of why we say Technical analysis and Elliott wave theory makes market predictable and gives probable path.

To know our view on Nifty and why we have been bullish all the while when majority have been on opposite side subscribe to the daily research report “The Financial Waves short term update”  and you will have your answers. This can be the beginning for Indian market and do not miss the next big opportunity which looks highly probable. For subscription visit http://wavesstrategy.com/index.php/store.html or call us on +91 9920422202 or write to us at helpdesk@wavesstrategy.com 

Nifty: Applying Volumes, Channels, Elliott wave counts, Time concepts, Moving Average!

By Waves Strategy Advisors, For more information on subscription of daily research reports and advisory visit www.wavesstrategy.com

In the below article we have shown how we apply  Volumes, Channels, Elliott wave counts, Time concepts, Moving Average on Nifty

Bottom Line: Nifty managed to cross above previous high of 5980 and finally captured 6000 psychological level on upside!

Nifty daily chart:

Nifty 60 mins chart:

Wave Analysis:

Applying Volumes: On 7^th October morning research we mentioned:“Revisiting volumes – Over past 2 days we can see how volume has increased with the uptrend and approached near the average line whereas during correction the volume continued to be subdued. I am not too strong follower of volumes but at times when there is a perfect rhythmic movement in this parameter along with price it is not worth ignoring. The day we will see volume reducing with up move it will be first sign of weakness but as long as volumes are increasing with uptick in prices the trend will be positive…As shown on 60 mins chart, the last segment of minor wave (a) is retraced in faster time thereby confirming that short term trend is now positive. A move below 5800 in faster time will be first sign of weakness. As long as this does not happen we can expect a move atleast towards 6040 …..” Nifty made a high of 6031.80 in today’s trading session itself!

On 9^th October morning report we mentioned: “As shown on 60 mins chart, prices are moving in an upward sloping blue channel. The support for this channel is now near 5880. So for even on short term we can see that each of the down leg is getting retraced faster” Nifty made a low near 5878 and bounced back by almost 130 points from there.

Applying Elliott wave: In today’s morning research we published: From Elliott wave perspective there are a few probable wave counts plausible out of which we have shown one of the counts. The up move has been contained within the blue channel and as long as this channel remains intact our bias will be positive. A strong improvement in momentum and increase in bar size on upside will indicate a ……… wave formation else ….. move back below ……… will indicate the bearish possibility or this is simply wave (b) of b that we have been showing before.

Applying Time concept: From Time perspective, each of the downleg is getting retraced in faster time. Even the down move of Tuesday got retraced completely in lesser time thereby maintaining the Time principle very well. This has been valid since the rally started from 5400 levels.

Time Cycles: Also if you remember we have a topping cycle of 69 days coming in by …….. So if a ……… move has to happen on it has to be in ……….. itself.

Indian markets have now reached the first milestone near 6040 which we have been mentioning over past 1 week. However, things are now at very crucial zone with Infosys results lined up tomorrow. We have already mentioned in our daily research report “The Financial Waves” about our expectations on Infosys movement with important levels.

In the 2 days training session on 12^th and 13^th October on “Elliott wave with Advanced Price and Time concepts” we will not only discuss about Elliott wave theory but also the current scenario ofIndian markets, why we think Gold secular bull market has ended and US markets biggest ever negative divergence! For more information on training contact us onhelpdesk@wavesstrategy.com or call us on +91 9920422202.

To know the short to medium term trend for Nifty along with detailed explanation of all the above mentioned indicators and why this is extremely important zone subscribe to this research for just INR 2000 per month. For subscription options visit http://wavesstrategy.com/index.php/store.html

Infosys results: Up by more than 13% But exactly within the range!

By Waves Strategy Advisors, For more information visit www.wavesstrategy.com

Today we had Q1 2013 results of Indian IT bellwether- Infosys. 

Company has reported better-than-expected 4 percent year-on-year rise.In first quarter consolidated net profit at Rs 2,374 crore, helped by new deal wins. The company also maintained its earlier US Dollar revenue growth guidance for FY14.

In the opening trade, Infosys shares rose more than 13% and currently trading near 2776 onNSE. In today’s Equity report – The Financial Waves STU we have covered this stock in morning before results were announced and shown completion of 5 wave structure on downside and expected an up move. This stock is having a weightage of approx 7.33% on index as of now & so it has contributed a rise in Nifty today.

Below we have shown 120 mins chart of Infosys pricked up from the equity report

Infosys 120 mins chart:

Published today before market opened:

Infosys 120 mins chart after result announced, currently quoting near 2795

Infosys weekly chart:

Wave Analysis:

In morning before results were declared we mentioned the following:

As seen above in weekly chart of Infosys, since 2011 prices are moving in the big range of 2050-3000 levels. In last two years (2011-2012) whenever company has declared the quarterly results we have observed gap up or gap down opening and prices moved violently. Even in this aggressive moves prices managed to protect 2050 and 3000 levels on downside and upside respectively. This signifies the importance of both these levels. If results drive the stock prices then why is it contained only within this range to the point? The stock has witnessed Gap up and Gap down moves of anywhere between 7% and 20% but this range has worked brilliantly so far.

Today we have Q1 2013 results of Infosys and every one may be expecting gap up or gap down move in this stock. Technically, prices managed to protect the strong support of 2050 and turned on upside for 3^rd time (shown by blue symbol). This indicates probably an up move in today’s trading session….. But if results are below expectations then there can be a spike towards 2050 and this level should be well respected we think.

As shown in 120 mins chart, prices are moving higher in the small blue channel and retraced almost 50% of wave C. At present, prices are moving near the immediate resistance of 2600. A move above 2600 will open up the further positive possibilities…..

In short, move above 2600 will continue the uptrend and prices can move higher towards 2750/2800 levels. Infosys is currently quoting at “2795”

There is more in depth analysis of Infosys in “The Financial Waves Short term update”research report published on daily basis.

Do not wait for outcome of an event to take trading decisions. Think objectively and catch the trend before it is over. This is only the one chart which is shown above. Equity research report also covers Nifty and 3 stocks. Charges for this equity research is INR 2000 and the subscription can be done directly from http://wavesstrategy.com/payment. For more information write to us at helpdesk@wavesstrategy.com or call on +912228831358 / +91 22 9920422202

Relation between Infosys results, Satyam Scandal, Japan Tsunami !!!

Relation between Infosys results, Satyam Scandal, Japan Tsunami !!!

By Waves Strategy Advisors, For information on various research reports visit www.wavesstrategy.com or write to helpdesk@wavesstrategy.com

Infosys results were declared on 12^th April 2013. 

Infosys fourth quarter net profit rose 3 percent year-on-year  (1 percent quarter-on-quarter) to Rs 2,394 crore, helped by higher other income and lower income tax expenses. The stock had a gap down opening of nearly 15%. Nifty on that day was down by 80 points and 75 points was due to Infosys. Nifty made a low of 5494 on that day but failed to breach its previous low of 5477 which was made on 10^th April 2013. Markets managed to protect the lows and started rallying from very next day as shown in below chart!

Nifty daily chart: Last updated 17^th April 2013

Satyam Scandal - Nifty daily chart 2008 - 2009

Satyam Scandal: A very similar event occurred 4 years back when we came across the SatyamScandal. The Scandal came in early 2009 where IT major Satyam Computer Services’s explosive revelations send the market on a southward spiral. Satyam’s shares plunged 77.69% in a single trading session on 7 January 2009, as chairman Ramalinga Raju resigned after announcing during trading hours that the company’s accounts were inflated. The shocking revelation of the accounting fraud, estimated at about Rs 7000 crore, sent the BSE 30-share Sensex tumbling 7.25% on that day. Interestingly in this case, again Indian markets managed to protect its previous low of 2008 and later started the uptrend.

Nikkei 225 (Japan) daily chart 2008 - 2009

Japan experienced one of the worst Tsunami and earthquake in 2011. The equity index of Japan Nikkei 225 clearly shows reaction to the event. In this case as well event did create lows but later market immediately reversed and resumed the original direction protecting the lows created.

Case in point: We believe that event does not determine the direction of the market but can produce only short term spikes that can last from few minutes to hours to few days but the original trend eventually resumes. Also a common thing betweenInfosys andSatyam is that both the events resulted in down move but that managed to protect the immediately preceding pivot lows. In case of Japan, equity markets quickly recovered after the event and prices rallied back towards the level before the event and then resumed its original trend.

It is therefore important not to trade based on news or event as they will be opposite exactly at the wrong time. Even this time Infosys results turned most of the people bearish exactly when we expected an important short term lows in Indian markets.

Do not get carried away by news but apply Elliott wave patterns and technical studies that helps us to be objective and trade in correct direction of the trend. Our daily research reports on Equity, Commodity and Currency markets provides detailed technical charts and explanation that justifies our stand objectively!!!

By Waves Strategy Advisors, For information on various research reports visit www.wavesstrategy.com or write to helpdesk@wavesstrategy.com

Infosys results – Down by more than 20%. What is driving the stock prices???

Infosys results – Down by more than 20%. What is driving the stock prices???

By Waves Strategy Advisors, For more information on daily research report visit

www.wavesstrategy.com or write to helpdesk@wavesstrategy.com

Infosys results declared on 12^th April 2013 :

Infosys fourth quarter net profit rose slightly higher-than-expected 3 percent year-on-year  (1 percent quarter-on-quarter) to Rs 2,394 crore, helped by higher other income and lower income tax expenses.

Results were positive but then too stock tanked 15% on opening and is currently down by more than 20% i.e. a fall of whole Rs. 600 on a single day. This is a disaster for a blue chip stock and it has been happening time and again. Infosys results are now known to produce a movement or anywhere between 10% to 20% on result day and then consolidate for months. This stock is having a weightage of approx 6.75% on index as of now & so it has contributed a fall of more than 40 points on Nifty. One may fall short to find objective fundamental reasons for such poor performance and trading will be challenging if you take action after the news announcement. However during such situation as well technical analysis can come handy to explain the major trend of this stock. Read further to know more:

The following excerpt is been picked from our research report “The Financial Waves” which was published on 11^th April 2013

Infosys 120 mins chart:

Infosys chart 120 mins as on 3.00 pm

 Wave Analysis:

Following was published a day before Infosys results were announced -

As seen in daily chart of Infosys, we can observe that prices are moving in a big range of 3000-2100 from past 2 years. This year prices faced the resistance of 3000 twice and fell steeply. Also we can see that prices made a double top formation and had given a fresh break on downside. To open further negative possibilities, it needs to move below 2730 which can accelerate selling pressure taking prices lower till 2550 levels.

As shown on 120 mins chart, prices after breaking the upward sloping blue channel prices thereby started moving in a sideways to negative direction.

From wave perspective, prices have ended minor wave v of intermediate wave B near 3000 levels and started the next leg on downside in the form of wave C

In short, as far as 3000 is protected on upside our bias for Infosys is negative. A move  below 2730 will take prices lower till 2550…

Infosys is currently (12^th April, 3:00 pm) quoting at 2310, down by 20% - 600 points!

Don’t follow the crowd, think objectively. Catch the trend before it is over. To know what is next for Nifty and 3 stocks that can give good trading opportunity visit www.wavesstrategy.com or write to us at helpdesk@wavesstrategy.com or call on +91 9920422202 / +91 22 28831358.

Infosys results: Stock continued to move by 7% to 10% on result day

Infosys results: Stock continued to move by 7% to 10%

By Waves Strategy Advisors (www.wavesstrategy.com)

Infosys result declared on 12^th October 2012: Shares of Infosys after plunging over 8 per cent during the day, shares of the company finally ended at Rs 2,395.65, down 5.36 per cent on the BSE. As per fundamental analysts Infosys continues to face challenges with regards to holding on to pricing and margins…

From technical perspective we applied basic channel techniques and Elliott wave counts to determine the path ahead of this stock. We were bearish on this stock well before the results were announced. The following excerpt is picked up from our daily research report published before the market opened on 9^th October… 

The bottom line we mentioned that, “In short, as long as prices move below the resistance of 2540 levels our bias is negative and prices could head lower till the next support of 2425 levels. Further, decisive move below this support will increase the selling pressure and prices could move lower till 2350 levels”

Infosys 120 mins chart: Published on 9^th October 2012:

Infosys movement after results announced (shown by circled area)

Waves Analysis:

We can observe above in 120 mins chart, in the last trading session prices sustained below the crucial resistance of 2565 levels and breached the upward moving blue channel on downside.

As per wave perspective, it seems that previous up move from 2100 till 2650 levels was in the form of wave a or 1 and prices are now correcting this impulsive up move.

In short, as long as prices move below the resistance of 2540 levels our bias is negative and prices could head lower till the next support of 2425 levels. Further, decisive move below this support will increase the selling pressure and prices could move lower till 2350 levels…. This is exactly what happened and stock closed at 2395 after making a low of 2310 after results were announced…

Subscribe to the daily research report “The Financial Waves Short term update” and see what charts tell us well before the news is announced. For more information write to us at helpdesk@wavesstrategy.com

Infosys Elliott wave analysis and Results.....

Infosys result weighs on the Indian markets but Bloomberg suggests profits beat analysts’ estimates!

Below is the chart of Infosys after the results were announced. Write to us on helpdesk@wavescapital.com to get complete elliott wave analysis and what we expect from IT industry as a whole. Few wave labels and path ahead for Infy have been purposely deleted from the below chart: 

Infosys Daily chart 

Infosys declared better than estimated profits as per Bloomberg but still this stock was down more than 8% in single day just based on future guidance. This is a very big fall for IT bellwether but is no surprise to us. For IT, we mentioned before on 27th December 2011 that “It is quite sometime since we covered IT bellwether TCS and Infosys. The above chart (shown on 27th December) is a Daily representation of TCS prices and it clearly indicates why we are refraining in providing any views on this stock. Prices have been moving up in overlapping formation with random movements within the channel. We also mentioned entire rally as corrective and so looking for selling opportunities”

This clearly put forwards the point what happens when wave structure suggests weakness but prices move up in overlapping formation. We believe that events do not drive stock market and can lead to only short term movements or spikes but it is the basic social mood and perception of the crowd that moves the stocks. Infosys movement after results clearly conforms to this belief.

To see what is path ahead for Infosys subscribe to our daily research publication of Indian equity markets - Short term Financial Edge. Write to us on helpdesk@wavescapital.com for more information.