In keeping our view on the Steidlmayer distribution, let’s look at Infosys today ( cash market).
For the many followers of Infy, the day of the results was an amazing erosion of value, not seen in years!
Here is the chart of Infosys in cash.
We will follow the Stedilmayer distribution ( SD) to point out a move in the instrument, which is around the corner.The details of SD can be found here
The Steidlamayer theory hold that markets do not go from bull to bear or bear to bull all the time, but form a balancing act in between through a 4 step process. The most lucrative opportunities are always in step 1 and step 4. Steps 2 and 3 are for people familiar with the art of writing options.
After the Initial price movement seen in INFY on results day, we had a few sessions where the markets tried to balance and create a new value or opportunity in the market.
As a follow up we also saw a P shaped profile which does seem to indicate that step 3 also seems to be getting over.
So we are preparing for step 4 which should go on to do at least 50 % of step 1 or form a new IPM below the balance area.
As the market is balanced, we hold a neutral view at today’s close and would look out for the following :
a) a move above 2966 cash, should bring 2991 and 3050 and 3090 subsequently.The region above 3090 is 50 % of the IPM as can also be confirmed by the single prints above it. This will be resistance for the move. Only a move above 3090 will bring momentum buying in infosys.
b)Should the market want to break above 2966, it should not trade below 2907 tomorrow.