Infosys ADRs Skyrocket 50% in Mysterious Surge, Then Plunge – What’s Behind the Volatility?

Summary
• Infosys (INFY) surges 5.65% intraday to $20.265, hitting a 52-week high of $30.00 before retreating.
• A 50% surge and trading halt triggered by a short squeeze and algorithmic trading glitches.
• Turnover spikes to 98.46 million shares, with options volatility surging across the chain.

Infosys’s American Depository Receipts (ADRs) experienced a surreal trading day, marked by a 50% surge followed by a sharp correction. The stock’s intraday high of $30.00—its 52-week peak—was followed by a rapid retreat to $18.99, creating a volatile range of $11.01. The surge was driven by a short squeeze and a technical glitch in financial data feeds, while options activity surged across multiple contracts.

Technical Glitch and Short Squeeze Fuel Infosys ADR Volatility
The explosive 50% surge in Infosys ADRs was triggered by a combination of a short squeeze and a systemic data error. A major lender’s recall of 45–50 million shares forced short sellers to scramble to cover positions, bidding up prices in a thinly traded counter. Simultaneously, a ticker mapping glitch mislabeled INFY as 'American Noble Gas Inc.' in automated reports, confusing algorithmic trading systems. These systems interpreted the anomaly as a momentum signal, amplifying the price action. The surge coincided with low liquidity, allowing a small number of trades to push the stock to extreme levels before circuit breakers halted trading.

Options Playbook: Leveraging High-Leverage Calls and Strategic Puts
• MACD: 0.347 (bullish), Signal Line: 0.269, Histogram: 0.078 (positive divergence)
• RSI: 73.74 (overbought), Bollinger Bands: Upper $18.68, Middle $17.76, Lower $16.84
• 200D MA: $17.52 (below current price), 30D Support: $17.74–$17.80

Infosys’s technicals suggest a short-term bullish trend amid overbought conditions. The RSI at 73.74 signals potential exhaustion, while the MACD histogram’s positive divergence hints at lingering momentum. Key levels to watch include the 200-day MA at $17.52 and the 30-day support zone of $17.74–$17.80. The stock’s 52-week high at $30.00 remains a critical resistance level.

Top Options Picks:
• INFY20260116C20 (Call, $20 strike, Jan 16 2026):
- IV: 37.77% (moderate), Leverage Ratio: 20.63% (high), Delta: 0.566 (moderate), Theta: -0.0197 (high decay), Gamma: 0.182 (high sensitivity), Turnover: 2.18M (liquid)
- Payoff (5% upside): $21.27 → $1.27/share gain. This call offers high leverage and liquidity, ideal for capitalizing on a breakout above $20.00.
• INFY20260116P20 (Put, $20 strike, Jan 16 2026):
- IV: 60.79% (high), Leverage Ratio: 16.18% (moderate), Delta: -0.437 (moderate), Theta: -0.0167 (high decay), Gamma: 0.114 (high sensitivity), Turnover: 326K (liquid)
- Payoff (5% downside): $19.25 → $0.75/share gain. This put provides downside protection if volatility resurges, with strong gamma to benefit from price swings.

Trading Outlook: Aggressive bulls may consider INFY20260116C20 into a break above $20.00, while cautious bears might use INFY20260116P20 to hedge against a potential retest of $18.99.

Backtest Infosys Stock Performance
The backtest of Infosys Limited (NYSE:INFY) after a 6% intraday surge from 2022 to now reveals favorable short-term performance, highlighting the potential for quick price appreciation. However, caution is advised due to limited long-term data supporting such high short-term gains.1. Short-Term Performance: The 6% intraday surge in 2022 led to a notable uptick in INFY's stock price, with the backtest showing strong near-term sentiment. This aligns with the stock's momentum breakout strategy, where the breakout trigger at $17.77 targeted $18.23.2. Long-Term Considerations: While the short-term outlook is positive, the long-term view remains cautious. There is no clear long-term support signal, and the stock's price positioning does not indicate a strong long-term trend. This is evident in the weak long-term support signals and the absence of clear price positioning signals.3. Dividend Yield: Infosys has a history of dividend payments, with an annual dividend of $0.41 per ADS in FY22, representing a 14.8% increase over FY21. This forward yield of 1.82% offers additional return for investors, supporting the stock's attractiveness for income-focused investors.In conclusion, Infosys Limited (NYSE:INFY) shows strong near-term sentiment and potential for price appreciation following a 6% intraday surge. However, investors should exercise caution due to limited long-term data supporting such high short-term gains. The stock's dividend yield also provides an additional return, making it an interesting option for those seeking income alongside growth potential.

Act Now: Infosys ADRs at Inflection Point – Watch for Breakouts or Breakdowns
Infosys’s ADRs are at a critical juncture, with technical indicators and options activity pointing to heightened volatility. The stock’s 52-week high at $30.00 and 200-day MA at $17.52 will be pivotal in determining its near-term trajectory. Sector leader Accenture (ACN) rose 1.54% today, signaling cautious optimism in IT services. Investors should monitor the 30-day support zone of $17.74–$17.80 and the 200-day MA for potential reversals. For now, the INFY20260116C20 and INFY20260116P20 options offer strategic leverage to capitalize on either a breakout or a breakdown. Watch for a $20.00 breakout or a retest of $18.99 to dictate next steps.