ICICI Gladiator Stocks: Simplex Infra, Infosys

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Simplex Infra (SIMCON) (CMP- | 257.00)
Technical view
Strategy: Buy Simplex Infra in the range of | 257.00–251.00 for a target price of | 310.00 with a stop loss below
| 224.00 on a closing basis
Key technical observations
¾ The share price of Simplex Infra made a sharp rebound from the key supports placed at ~| 205 during the
current week. In the process, it pierced through the short-term down trend resistance (placed at ~ | 256), thereby
signalling the end of the medium-term correction and resumption of the next uptrend led within the well
established uptrend. This offers a fresh opportunity to enter the stock with a favourable risk-reward set-up
¾ Earlier, the stock price retraced its February-July advance (80-391) by 61.8% over the past 13 weeks and is seen
finding buying support near the key support of | 200. The significant support of ~ | 200 was formed by the
confluence of the key Fibonacci retracement (at | 200) along with rising 52-week EMA (placed at | 207) and rising
trend line drawn off September 2013 lows and running through November 2013 and February 2014 lows
(currently placed at | 210). During the current week, the price action validated the support and made a sharp rally
resulting in a Bullish Key reversal Bar on a weekly time frame
¾ The volume behaviour is in line with the bull market assumption where rallies are supported by volumes. During
the current week, volumes surpassed their 50-week average of 2.15 lakh shares by 150% while the corrective
decline of the past 13 weeks witnessed subdued participation
¾ Among oscillators, the 14-week RSI is seen bouncing off its own support near reading of 40 validating the bullish
momentum from a medium-term perspective
Conclusion: Based on the various technical observations listed above, we believe the stock is set for its next up leg
and is likely to head towards the August 2014 swing highs placed at | 318 offering a favourable risk-reward set-up to
ride the bull trend.



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Infosys Ltd (INFTEC) (CMP- | 3810.00)
Technical view
Strategy: Buy Infosys Ltd in the range of | 3810.00–3750.00 for a target price of | 4490.00 with a stop loss below
| 3490.00 on a closing basis
The share price of Infosys remains in a well defined up trend on the long term chart and emerged as a key performer
over the past few quarters against benchmarks and even within the IT pack. The share price got a further shot in the
arm after it came out with better-than-expected earnings on Friday triggering the next leg of the overall up trend.
Key technical observations
¾ The share price zoomed to new life-time highs on Friday signalling the end of the short-term corrective phase and
resumption of the next up leg within the primary up trend offering a fresh entry opportunity
¾ While long term charts clearly exhibit a structural bull market for the stock, a closer look reveals that since May
2014 lows, the rallies are getting bigger and faster while corrections have been shallow and time consuming
affairs. Such price/time behaviour depicts a positive price structure and highlights the underlying bullish trend
¾ Recently, after the July – August rally of (| 3188-3795) consuming 32 trading sessions, the short-term correction
consumed 21 sessions retracing the rally by only 38.2% validating the positive structure. More importantly, the
entire correction panned out above the key retracement, which coincided with its March 2014 peak, which has
reversed its role from a resistance to a support exhibiting the change of polarity principle
¾ The volume behaviour is supportive of the bull market phenomenon as volumes during the current week doubled
their 10-week average of 50 lakh shares supporting sustainability of the up trend
¾ Among oscillators, the 14-week RSI is trending above the bullish threshold of 40. It is seen diverging from its nine
period average highlighting the bullish momentum in the stock price from a medium-term perspective
Conclusion: Based on the various technical observations listed above, we believe the stock is set for its next up leg
towards our target area of | 4500 being the 161.8% extension of the previous up move from | 3188.00 - | 3795.00 as
projected from the recent higher bottom of | 3570.00


LINK
http://content.icicidirect.com/mailimages/IDirect_Gladiatorstocks_Series5.pdf