In the last four months of last year, INFY – Infosys Technologies Ltd. – formed a symmetrical triangle. At the same time, it’s useful to observe that the stock moved between the generally Bollinger Bands and reversed as soon as they touched either band.
The last time price touched the upper Bollinger Band, though, a huge gap and a big candlestick above the upper Bollinger Band signaled the end of the triangle pattern.
Following that, price entered a consolidation stage, in the yellow box, with price moving horizontally till it touched the stock’s 10- day exponential moving average. As soon as this happened, the bulls reacted with three bullish candlesticks separated with gaps, that seem to mark the continuation of the uptrend.
Looking at the MACD, we see that during this consolidation the loss of momentum wasn’t strong enough to move the indicator below its signal line.
Finally, for our analysis to be complete, it’s important to observe that the stock’s Relative Strength is in a strong uptrend since the end of November, and it hasn’t touched its 20- day exponential moving average since then.