Software services company Infosys Ltd. (INFY) gapped lower Thursday in reaction to disappointing quarterly results. Let's check out the condition of the charts and indicators.
In this daily bar of INFY, below, I can see that prices have been in a downward path prior to today's downside price gap. This kind of price gap in a downtrend could turn out to be an exhaustion gap but it is too soon to know. Prices trade below the declining 50-day moving average line and the weak 200-day line.
The On-Balance-Volume (OBV) line has moved lower for the past 12 months and tells me that sellers of INFY are more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
In this weekly Japanese candlestick chart of INFY, below, I can see that prices have been in a decline since late 2021. Prices trade below the bearish 40-week moving average line. Reading the chart from right to left (the most recent price data is the most important) I fail to see any potential support area that buyers might focus on.
The OBV line and the MACD oscillator are bearish.
In this daily Point and Figure chart of INFY, below, I see a downside price target in the $11 area.
In this weekly Point and Figure chart of INFY, below, I used a five box reversal filter. Here the software suggests a price target in the $7 area.
Bottom line strategy: Unless INFY turns out to be an exhaustion gap, I expect further declines in price. Avoid the long side of INFY.
