Infosys Surges 2.5% Amid Buyback Hype: Is This the Catalyst for a Rebound?

Summary
• Infosys (INFY) surges 2.5% intraday to $16.79, breaking above key Bollinger Bands resistance
• Company to vote on $9.3B-style buyback at September 11 board meeting amid 25% YTD decline
• Options frenzy: INFY20251017P16 sees $58.7M turnover, INFY20251017C16 trades at 18.62% leverage ratio

Infosys is staging a dramatic intraday rebound as market participants digest the board's upcoming decision on a potential $9.3B-style share repurchase. With the stock trading 2.5% above its 19:43 ET open at $16.79, the move coincides with heightened options activity and a strategic valuation gap relative to 2022 buyback prices. The $16.81 intraday high tests critical technical levels as investors weigh the company's $14.265B cash hoard against sector headwinds.

Buyback Signal Sparks Capital Reallocation Debate
The 2.5% intraday rally in Infosys directly correlates with the board's scheduled September 11 vote on a potential share repurchase program. With the stock trading at a 23% discount to its 2022 buyback price of $1,850 (equivalent to ~$23.63 in current terms), the move reflects investor optimism about capital efficiency. The company's $14.265B cash reserves and 30%+ ROE over two years provide a strong foundation for accretive buybacks. Analysts note that a repeat of the 2022 program—which reduced shares by 2.5% and boosted EPS by 12% in FY23—could narrow Infosys's valuation gap with peers like TCS and Wipro.

Options Playbook: Leveraging Volatility in a Buyback-Driven Rally
• 200-day MA: $19.34 (well below current price)
• RSI: 46.34 (oversold territory)
• MACD: -0.126 (bearish) vs. Signal Line: -0.127 (neutral)
• Bollinger Bands: $15.81 (lower) to $17.59 (upper)
• Key support: $15.98–$16.01 (30D), resistance: $18.36–$18.51 (200D)

With Infosys testing critical technical levels ahead of its buyback decision, the INFY20251017P16 put and INFY20251017C16 call stand out as strategic plays. The put option (code INFY20251017P16) offers 41.90% leverage with 30.77% price change ratio, while the call (INFY20251017C16) provides 18.62% leverage and 23.76% price change potential. Both contracts exhibit strong liquidity (turnover of $587.6M and $1.635M respectively) and favorable Greeks: the put has 0.1898 gamma and -0.0064 theta, while the call shows 0.1739 gamma and -0.01096 theta. Under a 5% upside scenario (targeting $17.63), the call would yield max(0, $17.63 - $16) = $1.63 per contract, while the put would see max(0, $16 - $17.63) = $0.00. Aggressive bulls should consider INFY20251017C16 into a break above $18.36 resistance.

Backtest Infosys Stock Performance
The event-study back-test is complete.Key findings (close-to-previous-close ≥ 3 % “surge” days, 2022-01-01 → 2025-09-08):• 27 trading days met the 3 % threshold. • On average, the share price tended to pull back slightly after the surge: cumulative median return ≈ -0.74 % by day 30. • Win-rate never exceeded 63 % over the 30-day horizon, and none of the horizons reached statistical significance, indicating that a 3 % daily jump has not been a reliable bullish continuation signal for Infosys during this period.(For this analysis the “surge” was defined as: (Close – Previous Close) / Previous Close ≥ 3 %. Close prices were used throughout; holidays and non-trading days were excluded.)You can explore the full interactive report below.Feel free to dive into the visualization for day-by-day statistics, and let me know if you’d like to adjust the threshold, add risk controls, or test a different event definition.

Buyback Vote Looms: Position for a Capital-Return-Driven Rebound
The September 11 board meeting represents a pivotal inflection point for Infosys shareholders. With the stock trading at a 23% discount to its 2022 buyback price and a 2.5% YTD rebound already underway, the decision could catalyze a re-rating if management authorizes a significant repurchase. Technical indicators suggest the $16.69 middle Bollinger Band is a critical support level to watch, while the sector leader Accenture (ACN) trades with a -0.0313% intraday decline. Investors should monitor the INFY20251017P16 and INFY20251017C16 options for liquidity shifts as the buyback decision nears. Positioning for a capital-return-driven rally requires a disciplined approach to key levels and a close eye on the board's final decision.