Trade-Ideas LLC identified Infosys ( INFY) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Infosys as such a stock due to the following factors:

  • INFY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $98.0 million.
  • INFY has traded 4.4 million shares today.
  • INFY traded in a range 306.5% of the normal price range with a price range of $1.26.
  • INFY traded below its daily resistance level (quality: 13 days, meaning that the stock is crossing a resistance level set by the last 13 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on INFY:

Infosys Limited, together with its subsidiaries, provides business consulting, technology, engineering, and outsourcing services in North America, Europe, India, and internationally. The stock currently has a dividend yield of 3.5%. INFY has a PE ratio of 25. Currently there are 3 analysts that rate Infosys a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Infosys has been 4.4 million shares per day over the past 30 days. Infosys has a market cap of $43.8 billion and is part of the technology sector and computer software & services industry. Shares are up 21.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Infosys as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, reasonable valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 21.5%. Since the same quarter one year prior, revenues slightly increased by 5.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • INFY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.23, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to its closing price of one year ago, INFY's share price has jumped by 26.97%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, INFY should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • INFOSYS LTD reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INFOSYS LTD increased its bottom line by earning $0.88 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($0.90 versus $0.88).

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