Infosys (INFY) has formed a prominent **head and shoulders pattern** on its daily chart around September 2025, signaling a possible bearish trend reversal. Recent news and brokerage views show cautious optimism, but global factors—especially upcoming US regulations and tax proposals—are causing market volatility and uncertainty in the IT sector.
## Head and Shoulders Pattern Analysis
- The chart for Infosys displays a classic **head and shoulders formation**, with visible left shoulder, head, and right shoulder, generally seen as a bearish reversal signal after a preceding uptrend.
- Key support levels observed: around ₹1345–1376 where the stock has repeatedly bounced, and resistance at ₹1645–1650, which INFY has failed to breach recently.
- Breakdown below the neckline (current support range) could trigger a move towards ₹1150; however, some analysts argue the pattern’s symmetry and volume confirmation are lacking for a textbook reversal, so a decisive breakout is awaited.
- RSI hovers at neutral levels (~50), suggesting indecision and the need for confirmation before traders take strong positions.
## Brokerage Views and Target Prices
- **Nomura:** Maintains a ‘Buy’ rating, with a target of ₹1,880, slightly reduced from ₹1,900. This indicates ~19% potential upside from recent prices.
- **Jefferies:** Also retains a ‘Buy’ call, targeting ₹1,700 (~22% upside), noting strong cash flows despite a ~26% correction YTD.
- Many top brokerages still consensus ‘Buy’ for Infosys, with 26 out of 39 analysts in strong agreement. However, there are isolated bearish calls (e.g., CapitalVia’s ₹1,000 target).
- Trading range in the near term is forecast between ₹1,334–1,574.
## Impact of US News on INFY Shares
- **Buyback Announcement:** Infosys’ decision to consider a share buyback on September 11, 2025, sparked a bounce in IT stocks, including a 4% surge in INFY, temporarily boosting sector sentiment.
- **US Tax Threats:** The HIRE Act proposes a steep 25% excise tax on payments by US companies to foreign service providers, making Indian IT exports less competitive and worrying investors about FII outflows and renewed tariffs.
- FIIs sold nearly ₹32,000 crore of Indian IT shares in July-August, leading to a correction in INFY and peers.
- Market players are watching for US diplomatic resolutions—any positive news could stabilize IT stocks, but implementation of tough US policies would likely trigger further downside.
- **US Rate Cuts:** Hopes of US interest rate reductions have lent some support, as weaker dollar could help Indian exporters, but persistent trade tensions remain a headwind.
## Conclusion
- The **head and shoulders pattern** in Infosys charts indicates caution; a breakdown below neckline supports could lead to sharp declines.
- Brokerages see upside potential, with targets around ₹1,700–1,880, but are wary of international regulatory risks—especially from the US
- Buyback news is currently bolstering price and sentiment, counteracting negative US headlines, but the outlook remains highly sensitive to global policy shifts.
Careful attention to technical confirmation, brokerage guidance, and evolving US market news is recommended before making investment decisions in Infosys.
## Head and Shoulders Pattern Analysis
- The chart for Infosys displays a classic **head and shoulders formation**, with visible left shoulder, head, and right shoulder, generally seen as a bearish reversal signal after a preceding uptrend.
- Key support levels observed: around ₹1345–1376 where the stock has repeatedly bounced, and resistance at ₹1645–1650, which INFY has failed to breach recently.
- Breakdown below the neckline (current support range) could trigger a move towards ₹1150; however, some analysts argue the pattern’s symmetry and volume confirmation are lacking for a textbook reversal, so a decisive breakout is awaited.
- RSI hovers at neutral levels (~50), suggesting indecision and the need for confirmation before traders take strong positions.
## Brokerage Views and Target Prices
- **Nomura:** Maintains a ‘Buy’ rating, with a target of ₹1,880, slightly reduced from ₹1,900. This indicates ~19% potential upside from recent prices.
- **Jefferies:** Also retains a ‘Buy’ call, targeting ₹1,700 (~22% upside), noting strong cash flows despite a ~26% correction YTD.
- Many top brokerages still consensus ‘Buy’ for Infosys, with 26 out of 39 analysts in strong agreement. However, there are isolated bearish calls (e.g., CapitalVia’s ₹1,000 target).
- Trading range in the near term is forecast between ₹1,334–1,574.
## Impact of US News on INFY Shares
- **Buyback Announcement:** Infosys’ decision to consider a share buyback on September 11, 2025, sparked a bounce in IT stocks, including a 4% surge in INFY, temporarily boosting sector sentiment.
- **US Tax Threats:** The HIRE Act proposes a steep 25% excise tax on payments by US companies to foreign service providers, making Indian IT exports less competitive and worrying investors about FII outflows and renewed tariffs.
- FIIs sold nearly ₹32,000 crore of Indian IT shares in July-August, leading to a correction in INFY and peers.
- Market players are watching for US diplomatic resolutions—any positive news could stabilize IT stocks, but implementation of tough US policies would likely trigger further downside.
- **US Rate Cuts:** Hopes of US interest rate reductions have lent some support, as weaker dollar could help Indian exporters, but persistent trade tensions remain a headwind.
## Conclusion
- The **head and shoulders pattern** in Infosys charts indicates caution; a breakdown below neckline supports could lead to sharp declines.
- Brokerages see upside potential, with targets around ₹1,700–1,880, but are wary of international regulatory risks—especially from the US
- Buyback news is currently bolstering price and sentiment, counteracting negative US headlines, but the outlook remains highly sensitive to global policy shifts.
Careful attention to technical confirmation, brokerage guidance, and evolving US market news is recommended before making investment decisions in Infosys.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.