Technical analysisInfosys Technologies (NASDAQ: INFY) is an Indian IT services firm that develops custom software and provides business process outsourcing (accounting, HR, IT) for large corporations. Infosys has been a prime beneficiary of the outsourcing boom that has taken place in India throughout the 2000s. In past year Infosys share prices have seen drastic changes. For example on 13th March 2014, Infosys share fell over by 8.5% as the company expected sluggish growth in the March quarter due to muted spending by clients, especially in the retail sector. In the sections below, some techniques are used to find whether to sell or buy the stock, as on 1st July 2014.Simple moving averageFor SMAVG, we have taken three values: 50, 100 & 200

SMAVG (50): We have taken average of closing prices of last 50 days. This is a short term average which responds quickly to price changes. This value acted as a support price for the period July13 to March14. Whenever the share price touches SMAVG (50), the direction of price change reverses and the prices starts increasing. Between March14 and mid-June14, we were unable to do any analysis using SMAVG (50), as the share prices took a heavy fall on 13th March14. After 13th June14, SMAVG (50) is again acting as a support price for Infosys shares. SMAVG (100): We have taken average of closing prices of last 100 days. We could do any analysis from SMAVG (100).SMAVG (200): We have taken average of closing prices of last 200 days. This is a long term average which responds slowly to price changes. From July13 to April14 we could not do any analysis using SMAVG (200). After May14, SMAVG (200) acted as ceiling. We can see two peaks in share prices in May14 and June14, which after touching SMAVG (200), the prices starts falling. New trend: We can see the stock price oscillating between SMAVG (100) and SMAVG (200) in June14. SMAVG (100) acts as a support price while, SMAVG (200) acts a ceiling price. Analysis till 30th June14:We can see that the share prices is going to touch SMAVG (50). Through our analysis we have shown SMAVG (50) to be the support price. The price of Infosys share is going to decrease till it touches SMAVG (50). So we recommend selling the Infosys share as on 1st July14.

Fibonacci RetracementsFibonacci retracement were created by taking two extreme points (usually a major peak and trough) on a stock chart and dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%. Peak3797

61.8%3268

50%3105

38.2%2941

23.6%2739

Trough2412

Once these levels were identified, horizontal lines were drawn and used to identify possible support and resistance levels. Support level:Infosys stock prices declined by 8.5% on 13th March14. We considered support levels after this day. We identified 38.2% as the support level. The price level is Rs. 2941. The price touched this level two times after 13th March14. Resistance level:We applied similar methodology of doing analysis after 13th March14. The resistance level identified is 61.8%. The price level is Rs. 3268. As on 30th June14 the price levels are moving towards support level. Only after reaching the support level the price trend will change, and the price will start increasing. So the price will continue to fall. So we should sell the stock on 1st July.Relative Strength IndexWe used the average of 14 days to calculate RSI. We used RSI to compares the magnitude of recent gains to recent losses, in an attempt to determine overbought and oversold conditions of an asset. An asset is deemed to be overbought once the RSI approaches the 70 level. Likewise, if the RSI approaches 30, it is an indication that the asset may be getting oversold.

The RSI level on 30th June14 was 55. This was between 70 and 30. So the Infosys stock was neither overbought nor oversold. We couldnt determine whether to sell or buy the Infosys stock through RSI.