After gaining as much as 5.5 per cent, the stock of Infosys gave away some of its gains and closed the week with returns of 3.2 per cent. During this rally, the stock decisively breached its 200-day moving average. It is testing key resistance in the band between Rs.1,100 and Rs.1,110, a key trend-deciding area.
A strong break-out of this band will pave the way for an upmove to Rs.1,140 and then to Rs.1,160. Therefore, traders with a short-term view should tread with caution and go long only on a strong break out, with a fixed stop-loss.
But the stock will face some difficulty in moving above the long-term resistance zone between Rs.1,160 and Rs.1,170. Any declines in the coming week will take support at Rs.1,060 or Rs.1,030. Only a fall below Rs.1,030 will strengthen the down move and pull the stock down to Rs.1,000 levels.