Infosys Surges Over 10% Intraday: What's Fueling the Rally?

Summary
• Infosys (INFY) rockets 10.33% to $19.33, breaking through its 52-week high of $30
• CEO Salil Parekh clarifies employee visa controversy, boosting investor confidence
• Q3 revenue jumps 8.9% to ₹45,479 crore, outperforming Wall Street estimates

Infosys’ stock has staged a dramatic intraday rebound, surging over 10% amid a mix of earnings optimism and crisis management. The rally follows a viral social media claim about an employee’s alleged ICE detention, swiftly denied by management. With the stock trading near its 52-week high and a dynamic PE of 24.3, the market is recalibrating its stance on the IT giant’s resilience.

Revenue Guidance and CEO Clarification Drive INFY's Sharp Rally
Infosys’ 10.33% intraday surge stems from two pivotal catalysts: a 8.9% revenue increase to ₹45,479 crore in Q3 and CEO Salil Parekh’s firm denial of recent ICE detention claims. The company’s raised revenue view and AI-driven value proposition—highlighted in its Topaz platform—rekindled investor optimism. Meanwhile, Parekh’s clarification that an employee was denied entry (not detained) quelled fears of regulatory backlash. These moves, combined with a 3.2% revenue beat over Wall Street estimates, positioned INFY as a short-term winner in a volatile IT services sector.

IT Services Sector Gains Momentum as INFY Outperforms
The IT services sector, led by IBM’s 1.65% intraday gain, is seeing renewed interest amid AI-driven demand. However, Infosys’ 10.33% rally far outpaces sector peers, reflecting its unique positioning in enterprise AI and its swift crisis management. While IBM’s focus on hybrid cloud and AI remains strong, INFY’s combination of earnings momentum and narrative clarity has made it the sector’s standout performer.

Options and ETF Plays for INFY’s Volatile Rebound
• 200-day average: 17.48 (below current price)
• RSI: 28.65 (oversold)
• Bollinger Bands: 16.99–19.61 (current price near upper band)
• MACD: -0.01 (bearish), but RSI suggests potential reversal

INFY’s technicals present a high-conviction trade: the stock is trading near its 52-week high and has broken above the 200-day MA. Key levels to watch include the 19.61 upper Bollinger Band and the 18.30 30-day SMA. The 28.65 RSI indicates oversold conditions, suggesting a possible continuation of the rally. While no leveraged ETFs are listed, the options chain offers actionable plays.

Top Option 1: INFY20260220C19 (Call)
• Strike: $19 | Expiration: 2026-02-20 | IV: 34.97% | Leverage: 18.41% | Delta: 0.586 | Theta: -0.014 | Gamma: 0.178 | Turnover: 481,879
• IV: Moderate volatility supports directional bets | Leverage: High gearing amplifies returns | Delta: Mid-range sensitivity to price moves | Theta: Aggressive time decay | Gamma: High sensitivity to INFY’s volatility
• This call option offers a 162.50% price change potential under a 5% upside scenario (ST = $20.29). Its high gamma and moderate delta make it ideal for a continuation of INFY’s rally.

Top Option 2: INFY20260220P20 (Put)
• Strike: $20 | Expiration: 2026-02-20 | IV: 41.69% | Leverage: 13.81% | Delta: -0.568 | Theta: -0.008 | Gamma: 0.151 | Turnover: 526,980
• IV: Elevated volatility cushions downside risk | Leverage: Moderate gearing | Delta: Strong bearish hedge | Theta: Lower time decay | Gamma: High responsiveness to INFY’s swings
• This put option provides a 48.15% price change potential under a 5% downside scenario (ST = $18.32). Its high IV and gamma make it a strategic hedge against a pullback.

Action: Aggressive bulls may consider INFY20260220C19 into a breakout above $19.61. Conservative traders should pair INFY20260220P20 with a core long position to cap downside risk.

Backtest Infosys Stock Performance
The backtest of Infosys (INFY) after a 10% intraday increase from 2022 to the present shows mixed results. While the stock experienced a maximum return of -0.02% during the backtest period, with a maximum return day on January 1, 2026, the overall trend was negative, with a 3-day win rate of 52.88%, a 10-day win rate of 53.09%, and a 30-day win rate of 49.89%. This suggests that while short-term gains were possible, the stock's performance over longer periods was lackluster.

Bullish INFY Setup: Key Levels and Immediate Action Steps
Infosys’ 10.33% intraday surge is a blend of earnings momentum and narrative clarity, with technicals and options data pointing to a continuation of the rally. The stock’s proximity to the 52-week high and oversold RSI suggest a potential test of the $19.61 upper Bollinger Band. Immediate resistance at $19.61 and support at $18.30 (30-day SMA) will dictate next steps. Sector leader IBM’s 1.65% gain underscores the IT services sector’s strength, but INFY’s unique catalysts make it a standout. Watch for a breakout above $19.61 or a breakdown below $18.30 to confirm direction.