Infosys fills the gap, takes support of 100-day EMA

Infosys, the second largest IT company, opened with a gap-down of 6 per cent on Monday, post Q4FY18 result announced on Friday after market hours. The Q4 results were not so exciting with just 1.6 per cent revenue growth at Rs. 18,083 crore, while 28.1 per cent de-growth in net profit at Rs. 3,690 crore as against the previous quarter. However, the result and FY19E guidance came in-line with the street expectations. The fall was in the wake of a cut in margin guidance. 
  
Nevertheless, the stock of Infosys opened 7/8 points higher than its major support level of 1,091. Further, the stock’s opening and low were the same and thereby it surged 3 per cent on an intraday basis, attempting to cover the gap. Moreover, 1,098 acted as the 100-day EMA support for the stock. 

Considering the daily view, the stock has been trading in a range of 1,190-1,090 since January 25, 2018. Hence, unless it breaches the levels on either sides on a closing basis, it would give zig-zag within the range. 

Considering the broader view, the stock is consolidating for the last two months after 5 consecutive monthly upticks and 1,083 followed by 1,041 act as 38.2 per cent and 50 per cent, retracement levels. In case of a bounce back, we hold 1,190-1,200 as a breakout level.