The highlight of the day is going to be Infosys, from earnings perspective. The company has announced solid results and has beaten the estimates. However, they have moderated the estimates for the remainder of the fiscal year. The earnings soared by over 70% and the shares in the Mumbai (India) market were flat to 3% rise.
Earlier I had mentioned that Potential formula for stocks to go crazy after earning announcement is when a) earnings, revenues for current quarter beat estimates and 2) Estimates are also raised for the next quarter or year. So here we are, one is the good the other is not spectacular (Though, street will take sometime to digest why they are not raising estimates).
I played this for intraday but I was out before market close to lock in profit as I wasn’t very confident. Intraday chart clearly shows as positive expectancy before the results announcement.
Looking at the daily chart, If INFY decides to go higher; it will find resistance at $55, followed by $57.5. I may be wrong but I don’t think, at least today, INFY has steam to go any farther than that. If however, it starts to fall, it will find strong support at $49.5- $50 region.
The smarter will assess the result and look for hint to play WIT, CTSH and TCS.Porfitable trading, OptionPundit