Infosys Gains 5.42% as Bullish Candlestick Patterns and Golden Cross Fuel 13.79% Three-Day Rally

Infosys (INFY) has surged 5.42% in the most recent session, marking a three-day rally with a cumulative gain of 13.79%. This sharp upward momentum suggests strong buyer participation, with the price breaking above key resistance levels observed in the preceding weeks. The recent price action reflects a bullish bias, supported by expanding candlestick patterns such as the "Bullish Engulfing" and "Harami," which indicate potential continuation of the uptrend. Key support levels appear to be consolidating around the 17.40–17.60 range, while resistance has shifted to the 19.18–20.22 band following the recent breakout.
Candlestick Theory
The recent candlestick formations, particularly the long-bodied bullish candles with minimal lower shadows, suggest strong conviction among buyers. A notable pattern is the "Inverted Hammer" observed around late December 2025, which preceded the current rally. This pattern, combined with the price holding above the 18.22 psychological level, indicates that short-term support is firm. However, the absence of bearish reversal patterns like "Shooting Stars" or "Evening Stars" suggests the uptrend may persist unless a key resistance level, such as the 20.22 peak, is decisively breached.
Moving Average Theory
The 50-day moving average (DMA) currently sits around 17.80, while the 200-DMA is at approximately 18.10.

The price has crossed above both, forming a "Golden Cross" with the 50-DMA, which historically signals a bullish trend. The 100-DMA at 18.00 further reinforces this alignment, indicating a multi-timeframe bullish bias. However, the 200-DMA remains a critical psychological level; a sustained close above this could validate the transition from a sideways to a trending phase.
MACD & KDJ Indicators
The MACD histogram has shown positive divergence, with the line crossing above the signal line in mid-December, confirming momentum in the uptrend. The KDJ stochastic oscillator, currently in overbought territory (K=85, D=78), suggests potential exhaustion in the short term. However, the absence of bearish divergence between price and the K line mitigates immediate reversal risks. A pullback to the 70–75 level for KDJ may indicate a resumption of the trend after consolidation.
Bollinger Bands
The price has recently tested the upper Bollinger Band (20.22), indicating heightened volatility. The bands have expanded following a period of contraction in early December, suggesting a breakout scenario. If the price sustains above the 19.18–19.31 range, the upper band could act as dynamic resistance. Conversely, a retest of the lower band (17.40–17.77) would signal a potential trend reversal.

Volume-Price Relationship
Trading volume has surged in tandem with the price rally, particularly in late December, where daily volumes exceeded 118 million shares. This volume surge validates the strength of the uptrend, as higher prices are accompanied by increasing buyer participation. However, a potential red flag would be a divergence between rising prices and declining volume, which could signal waning momentum.
Relative Strength Index (RSI)
The RSI has entered overbought territory (above 70) since late December, reflecting the 13.79% three-day gain. While this typically signals a potential correction, the RSI has not formed bearish divergence, suggesting the uptrend may continue. A retest of the 60–65 level could reaffirm bullish momentum, but traders should remain cautious if RSI drops below 50, which may indicate a deeper pullback.
Fibonacci Retracement
Applying Fibonacci levels to the December 2025 low (17.33) and the recent high (20.22), key retracement levels at 38.2% (18.73) and 50% (18.78) have already been tested. The 61.8% level at 18.52 could act as a critical support if the rally stalls. A break below 17.80 (the 200-DMA) would invalidate the Fibonacci-based bullish case, while a sustained close above 20.22 could trigger a retest of the 21.19–21.57 resistance cluster from earlier in the year.
The confluence of bullish candlestick patterns, aligned moving averages, and strong volume supports a continuation of the uptrend. However, overbought RSI and KDJ readings caution against complacency, as corrections are common after such sharp moves. Divergences between MACD and price action should be monitored for early reversal signals. Traders may find opportunities to add to long positions on pullbacks to the 18.73–18.78 Fibonacci level, provided the 200-DMA remains intact.