Infosys Ltd’s Mixed Week: -1.58% Price Change Amid Divergent Options Activity

5 January: Heavy Options Activity Amid Price Weakness

Infosys opened the week under pressure, closing at Rs.1,606.40, down 2.09% from the previous Friday. The stock underperformed the Sensex’s 0.18% decline, reflecting short-term selling pressure. Despite this, the stock attracted significant institutional interest with a traded value exceeding ₹189 crore and volume of over 11.7 lakh shares.

Notably, the derivatives market showed a divergence in sentiment. Call options at the 1700 strike price saw robust activity with 4,743 contracts traded, signalling bullish speculation for a price rise above 6.7% within three weeks. Conversely, put options at strikes near the current price (₹1,600 and ₹1,620) also recorded heavy volumes, indicating hedging or bearish positioning ahead of the 27 January expiry.

Technical indicators showed the stock trading above its 50-, 100-, and 200-day moving averages but below the 5- and 20-day averages, suggesting medium- to long-term strength amid short-term weakness. Delivery volumes declined by nearly 50% compared to the five-day average, pointing to reduced conviction among long-term holders.

6 January: Slight Recovery Despite Sensex Decline

The stock rebounded modestly on 6 January, gaining 0.30% to close at Rs.1,611.15, even as the Sensex declined 0.19%. Trading volumes were lower at 2.2 lakh shares, and delivery volumes continued to show a decline, reflecting cautious investor participation. The stock remained below its short-term moving averages but maintained support above longer-term averages, indicating consolidation.

7 January: Outperformance and Renewed Institutional Interest

Infosys delivered its strongest performance of the week on 7 January, rising 1.72% to Rs.1,638.90, outperforming the Sensex’s marginal 0.03% gain and the sector’s 0.81% rise. The stock recorded one of the highest traded values on the day at ₹165.45 crore, with over 10 lakh shares changing hands, signalling renewed institutional confidence.

Technical indicators turned bullish as the stock traded above all key moving averages (5-, 20-, 50-, 100-, and 200-day), confirming a strong upward trend. Call option activity surged, particularly at the 1,640 strike price, with 13,431 contracts traded, reflecting growing optimism for moderate near-term upside. However, delivery volumes remained subdued, down 26.73% compared to the five-day average, suggesting some profit booking or portfolio rebalancing.

8 January: Sharp Decline Amid Broader Market Weakness

On 8 January, Infosys reversed gains, falling 1.57% to Rs.1,613.15, underperforming the Sensex’s 1.41% decline. The stock faced heavy selling pressure with a spike in volume to over 5.2 lakh shares. Delivery volumes declined by 10.95%, indicating cautious investor sentiment. Despite the drop, the stock remained above its medium- and long-term moving averages, suggesting underlying support.

9 January: High-Value Trading Amid Mixed Sentiment

Infosys closed the week on 9 January at Rs.1,614.75, up 0.10% on the day but down 1.58% for the week. The stock saw one of the highest traded values at ₹574.22 crore with volume exceeding 35 lakh shares, underscoring sustained liquidity and institutional interest despite a modest price decline. The Sensex fell 0.89% on the day, with Infosys outperforming the broader market but slightly underperforming its sector.

Delivery volumes remained subdued, reflecting some profit-taking or cautious positioning ahead of upcoming corporate events. The stock traded below its short-term moving averages but stayed comfortably above medium- and long-term averages, indicating a mixed technical picture with potential support for medium-term investors.

Key Takeaways

Positive Signals: Infosys demonstrated resilience by outperforming the Sensex with a smaller weekly decline of 1.58% versus 2.62% for the benchmark. The stock’s technical positioning above medium- and long-term moving averages supports a constructive medium-term outlook. Robust institutional interest and high traded values throughout the week underline strong liquidity and market confidence. The recent upgrade to a Buy rating by MarketsMOJO with a Mojo Score of 70.0 further reinforces positive fundamentals.

Cautionary Signals: Short-term price volatility and declines below the 5- and 20-day moving averages indicate near-term selling pressure. Delivery volumes have consistently declined, suggesting reduced conviction among long-term holders and potential profit-booking. The heavy put option activity near current price levels signals hedging and bearish sentiment ahead of the 27 January expiry, highlighting uncertainty. The divergence between bullish call option positioning and bearish put option volumes points to a complex market environment requiring close monitoring.

Conclusion

Infosys Ltd’s trading week was marked by a nuanced balance of optimism and caution. While the stock outperformed the broader market and maintained strong institutional interest, short-term technical weakness and mixed options market activity suggest investors are hedging against near-term risks. The recent upgrade to a Buy rating and solid fundamentals provide a foundation for medium-term confidence, but the upcoming January expiry will be a critical period to watch for directional clarity. Investors should remain attentive to delivery volumes, technical signals, and sector developments as they assess the stock’s trajectory in the weeks ahead.

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