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Infosys Ltd.
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  • News
  • Financials
  • Technicals
  • Peers
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  • About

Infosys Ltd.

  • 1,126.45-14.45 (-1.27%)
  • Closed
  • As On: 03 Dec, 2020, 03:59 PM IST
  • Open1,147.00
  • High1,147.00
  • Low1,122.70
  • Prev Close1,140.90
  • Volume1,62,12,621
  • VWAP(₹)1,128.62
  • Margin expansion

    Second quarter saw a margin expansion, part of which came from lower travelling and other operational expense. A part of this would stay, but travel expenses are expected to rise in the coming quarters in the post-Covid world.
  • Healthy deal Pipeline

    The deals pipeline is expected to remain strong and there was a increase in repeat customers. Across the globe there is an increased focus of manufacturing companies on digitisation and contingency planning, which would add a tail wind to the company. The company reported 16 large deals in the second quarter.
  • New administration in White House

    Will the new US administration continue it harsh policy on H1- B visa or relax it, as expected, is a factor which will impact the company’s near-term fortune. Though in the last few years, the Indian IT sector has learnt to live with the restrictions.
  • Currency gains

    Given abundant liquidity in the global markets, there is little scope for any strong gains in terms of US dollar. So, the tailwind of currency might be missing for some time to come.

Key Metrics

  • PE Ratio(x)26.87
  • EPS - TTM(₹)41.92
  • MCap(₹ Cr.)4,79,801
  • MCap Rank2
  • PB Ratio(x)7.26
  • Div Yield(%)1.55
  • Face Value(₹)5.00
  • 52W High(₹)1,186.00
  • 52W Low(₹)509.25
  • MCap/Sales2.99
  • Beta(1 Month)0.83
  • BV/Share(₹)154.58

Returns

  • 1 Day-1.27%
  • 1 Month6.01%
  • 3 Months20.41%
  • 1 Year61.3%
  • 3 Years134.97%
  • 5 Years112.99%

Financials

    • Employee & Interest Expense

      Company has spent less than 1% of its operating revenues towards interest expenses and 56.05% towards employee cost in the year ending Mar 31, 2020. (Source: Consolidated Financials)
    • Quarterly Revenue Growth Comparison

      Company reported total income growth on both quarterly & yearly basis. Total income for Sep 30, 2020 quarter was Rs 25140.0 cr which is an increase of 4.14% QoQ and 8.11% YoY. (Source: Consolidated Financials)
    Sep 2020Jun 2020Mar 2020Dec 2019Sep 2019
    Total Income25,140.0024,140.0023,881.0023,919.0023,255.00
    Total Income Growth (%)4.141.08-0.162.863.18
    Total Expenses18,342.0018,300.0018,340.0018,028.0017,717.00
    Total Expenses Growth (%)0.23-0.221.731.762.22
    EBIT6,798.005,840.005,541.005,891.005,538.00
    EBIT Growth (%)16.405.40-5.946.376.36
    PAT4,845.004,233.004,321.004,457.004,019.00
    PAT Growth (%)14.46-2.04-3.0510.905.82
    EBIT Margin (%)27.0424.1923.2024.6323.81
    Net Profit Margin (%)19.2717.5418.0918.6317.28
    Basic EPS (₹)11.4510.0710.1910.519.46
    Sep 2020Jun 2020Mar 2020Dec 2019Sep 2019
    Total Income21,628.0020,803.0020,772.0020,862.0020,270.00
    Total Income Growth (%)3.970.15-0.432.922.15
    Total Expenses15,434.0015,394.0015,613.0015,429.0015,119.00
    Total Expenses Growth (%)0.26-1.401.192.050.82
    EBIT6,194.005,409.005,159.005,433.005,151.00
    EBIT Growth (%)14.514.85-5.045.476.25
    PAT4,497.004,008.004,069.004,076.003,829.00
    PAT Growth (%)12.20-1.50-0.176.457.28
    EBIT Margin (%)28.6426.0024.8426.0425.41
    Net Profit Margin (%)20.7919.2719.5919.5418.89
    Basic EPS (₹)10.569.419.559.578.97
    FY 2020FY 2019FY 2018FY 2017FY 2016
    Total Revenue93,594.0085,557.0073,715.0071,564.0065,564.00
    Total Revenue Growth (%)9.3916.063.019.1515.53
    Total Expenses71,587.0064,516.0053,374.0051,583.0046,821.00
    Total Expenses Growth (%)10.9620.883.4710.1718.64
    Profit after Tax (PAT)16,594.0015,404.0016,029.0014,353.0013,489.00
    PAT Growth (%)7.73-3.9011.686.419.03
    Operating Profit Margin (%)24.4225.4528.8429.1730.01
    Net Profit Margin (%)18.2718.6322.7220.9521.60
    Basic EPS (₹)38.9735.4471.0762.8059.02
    FY 2020FY 2019FY 2018FY 2017FY 2016
    Total Revenue81,747.0075,959.0065,960.0062,351.0056,989.00
    Total Revenue Growth (%)7.6215.165.799.4112.54
    Total Expenses61,270.0056,032.0046,052.0043,413.0039,389.00
    Total Expenses Growth (%)9.3521.676.0810.2215.00
    Profit after Tax (PAT)15,543.0014,702.0016,155.0013,818.0012,693.00
    PAT Growth (%)5.72-8.9916.918.864.35
    Operating Profit Margin (%)26.0427.2532.1431.9432.60
    Net Profit Margin (%)19.6620.1126.0823.3023.51
    Basic EPS (₹)36.3433.6671.2860.1655.26

    All figures in Rs Cr, unless mentioned otherwise

  • AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Total Assets92,768.0084,738.0079,890.0083,355.0075,350.00
    Total Assets Growth (%)9.486.07-4.1610.6213.67
    Total Liabilities26,924.0019,732.0014,966.0014,373.0013,606.00
    Total Liabilities Growth (%)36.4531.854.135.64-12.52
    Total Equity65,844.0065,006.0064,924.0068,982.0061,744.00
    Total Equity Growth (%)1.290.13-5.8811.7221.70
    Current Ratio (x)2.622.843.553.833.91
    Total Debt to Equity (x)0.000.000.000.000.00
    Contingent Liabilities5,009.004,891.00--1,770.00
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Total Assets81,041.0078,930.0075,877.0079,885.0072,732.00
    Total Assets Growth (%)2.674.02-5.029.8317.66
    Total Liabilities18,807.0016,219.0012,375.0011,868.0011,650.00
    Total Liabilities Growth (%)15.9631.064.271.87-15.24
    Total Equity62,234.0062,711.0063,502.0068,017.0061,082.00
    Total Equity Growth (%)-0.76-1.25-6.6411.3527.07
    Current Ratio (x)2.883.003.784.053.98
    Total Debt to Equity (x)0.000.000.000.000.00
    Contingent Liabilities4,730.004,617.006,068.007,727.001,483.00

    All figures in Rs Cr, unless mentioned otherwise

    • Conservative Profit Recognition

      Over last 5 years, operating cash flow has been continuously rising as compared to company's net profit. (Source: Consolidated Financials)
    • Decrease in Cash from Investing

      Company has used Rs 239.0 cr for investing activities which is an YoY decrease of 58.43%. (Source: Consolidated Financials)
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Net Cash flow from Operating Activities17,003.0014,841.0013,218.0011,531.0010,028.00
    Net Cash used in Investing Activities-239.00-575.004,452.00-14,542.00-901.00
    Net Cash flow from Financing Activities-17,591.00-14,512.00-20,505.00-6,939.00-6,813.00
    Net Cash Flow-919.00-303.00-2,754.00-10,072.002,330.00
    Closing Cash & Cash Equivalent18,649.0019,568.0019,871.0022,625.0032,697.00
    Closing Cash & Cash Equivalent Growth (%)-4.70-1.52-12.17-30.807.67
    Total Debt/ CFO (x)0.000.000.000.000.00
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Net Cash flow from Operating Activities15,572.0013,989.0012,475.0010,478.009,578.00
    Net Cash used in Investing Activities-116.00-587.005,684.00-13,494.00-1,207.00
    Net Cash flow from Financing Activities-17,391.00-14,571.00-20,536.00-6,968.00-6,908.00
    Net Cash Flow-1,989.00-1,219.00-2,383.00-10,023.001,454.00
    Closing Cash & Cash Equivalent13,562.0015,551.0016,770.0019,153.0029,176.00
    Closing Cash & Cash Equivalent Growth (%)-12.79-7.27-12.44-34.355.24
    Total Debt/ CFO (x)0.000.000.000.000.00

    All figures in Rs Cr, unless mentioned otherwise

  • AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Return on Equity (%)25.3523.7124.6820.8021.84
    Return on Capital Employed (%)30.8331.8330.9228.8130.17
    Return on Assets (%)17.8818.1720.0617.2117.90
    Interest Coverage Ratio (x)130.450.000.000.000.00
    Asset Turnover Ratio (x)97.8697.5688.2782.1582.86
    Price to Earnings (x)16.3920.9215.4116.2920.66
    Price to Book (x)4.154.963.803.394.51
    EV/EBITDA (x)10.1113.1310.229.7312.18
    EBITDA Margin (%)27.6127.8831.4831.6632.35
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Return on Equity (%)24.9723.4425.4420.3120.78
    Return on Capital Employed (%)31.2831.3831.0027.8028.78
    Return on Assets (%)19.1718.6221.2917.2917.45
    Interest Coverage Ratio (x)180.620.000.000.000.00
    Asset Turnover Ratio (x)97.5392.6281.6374.2174.22
    Price to Earnings (x)17.5422.0315.3416.9822.08
    Price to Book (x)4.385.163.903.454.58
    EV/EBITDA (x)11.4014.3010.8410.6213.38
    EBITDA Margin (%)28.7629.4434.4134.1834.66
    • Low risk of covid infection

      We have evaluated the impact of COVID-19 resulting from (i) the possibility of constraints to render services which may require revision of estimations of costs to complete the contract because of additional efforts ; (ii) onerous obligations ; (iii) penalties relating to breaches of service-level agreements, and (iv) termination or deferment of contracts by customers. We have concluded that the impact of COVID-19 was not significant based on these estimates for fiscal 2020.

    • Geographic and economy's to watch

      Spending on technology products and services by our clients and prospective clients is subject to fluctuations depending on many factors, including both the economic and regulatory environment in the markets in which they operate. Economic slowdown or other factors may affect the economic health of the United States, the United Kingdom, the European Union (EU), Australia or those industries where our revenues are concentrated.

    • Impressive client addition

      We, along with our subsidiaries, added 376 new clients, including a substantial number of large global corporations. Our total client base at the end of the year stood at 1,411.

Technicals

  • 5 Day EMA Crossover

    Bearish signal on daily chart

    Appeared on: 3 Dec 2020

    5D EMA: 1127.36

    Last Signal 25 Nov 2020 (Loss -2.21%)

    Average price decline of -1.79% within 7 days of Bearish signal in last 5 years

    10 Day EMA Crossover

    Bullish signal on daily chart

    Appeared on: 1 Dec 2020

    10D EMA: 1118.98

    Last Signal 23 Nov 2020 (Gain 1.32%)

    Average price gain of 2.18% within 7 days of Bullish signal in last 5 years

    14 Day EMA Crossover

    Bullish signal on daily chart

    Appeared on: 1 Dec 2020

    14D EMA: 1117.06

    Last Signal 23 Nov 2020 (Gain 1.32%)

    Average price gain of 2.16% within 7 days of Bullish signal in last 5 years

    20 Day EMA Crossover

    Bullish signal on daily chart

    Appeared on: 1 Dec 2020

    20D EMA: 1113.39

    Last Signal 23 Nov 2020 (Gain 1.32%)

    Average price gain of 2.11% within 7 days of Bullish signal in last 5 years

  • 49%
    Positive Movement
    since 1st Jan 2005
    on basis
    51%
    Negative Movement
    since 1st Jan 2005
    on basis
    Exclude

    Global Meltdown1st Jan 2008 to 10th Nov 2008

    Covid Crisis1st Feb 2020 to 31st Mar 2020

  • R11141.40Pivot

    1132.05

    S11117.10
    R21156.35S21107.75
    R31180.65S31083.45
  • 5 Days14 Days28 Days
    28.4929.5929.49

Peers

    • CHART
    • TABLE
    • 1D
    • 1W
    • 1M
    • 3M
    • 6M
    • 1Y
    • 5Y
  • NAMEP/E (x)P/B (x)ROE %ROCE %ROA %Rev CAGR [3Yr]OPMNPMBasic EPSCurrent RatioTotal Debt/ Equity (x)Total Debt/ CFO (x)
    Infosys26.874.1525.3530.8317.889.2624.4218.3238.972.620.000.00
    TCS33.178.1338.4446.0026.749.6527.5020.6786.193.330.000.00
    HCL Tech19.192.3121.5624.4713.3313.4320.4915.6440.751.620.090.35
    Wipro21.362.0317.5721.7611.963.1921.2315.9716.672.400.110.58
    Tech Mahindra22.192.2618.4819.8810.798.2714.2510.5846.212.120.110.56
    Add More
    Annual Ratios (%)

    Choose from Peers

      Choose from Stocks

      Shareholding Patterns

      • Category30 Sep 202030 Jun 202031 Mar 202031 Dec 2019
        Promoters12.9513.1513.1513.15
        Pledge0.000.000.000.00
        FII31.3130.4731.0131.76
        DII24.9625.4224.6823.98
        Mutual Funds14.2313.8313.6613.36
        Others30.7830.9631.1631.11
      • CategoryNo. of SharesPercentage% Change QoQ
        Promoters55,16,82,33812.95 %-0.20
        Pledge00.00 %0.00
        FII1,33,36,53,08431.31 %0.84
        DII1,06,34,10,06424.96 %-0.46
        MF60,62,12,76714.23 %0.40
        Others1,31,06,66,11230.78 %-0.18

      Mutual Funds Ownership

      MF Ownership as on 31 October 2020

      • Equity: Large Cap
        • 5,725.30

          Amount Invested (in Cr.)

        • 7.73%

          % of AUM

        • -4.54

          % Change (MoM basis)

      • Equity: Large Cap
        • 2,780.00

          Amount Invested (in Cr.)

        • 9.05%

          % of AUM

        • -2.77

          % Change (MoM basis)

      • Hybrid: Dynamic Asset Allocation
        • 2,432.56

          Amount Invested (in Cr.)

        • 7.01%

          % of AUM

        • 0.00

          % Change (MoM basis)

      Futures & Options

        • Expiry Month
        DatePrice

        27-09-2020Current

        1,132.85-14.95 (-1.30%)

        1,149.75
        Open
        1,152.80
        High
        1,130.20
        Low
        1,147.80
        Prev Close
        14,337
        Contracts Traded
        1,95,383.49
        Turnover (₹ Lakhs)
        • Type
        • Expiry Month
        • Strike Price
        DatePrice

        27-09-2020Current

        0.00-271.45 (-100.00%)

        0.00
        Open
        0.00
        High
        0.00
        Low
        271.45
        Close
        0
        Contracts Traded
        0.00
        Turnover (₹ Lakhs)

      Corporate Actions

      • Interim

        240%

        Oct 14, 2020

        Board Meeting

        Quarterly Results & Interim Dividend

        Sep 15, 2020

        Board Meeting

        Quarterly Results

        Jul 08, 2020

      • Announced onMeeting on
        Sep 15, 2020Oct 14, 2020
        Quarterly Results & Interim Dividend
        Jul 08, 2020Jul 15, 2020
        Quarterly Results
        Apr 15, 2020Apr 20, 2020
        Audited Results & Final Dividend
        Dec 30, 2019Jan 10, 2020
        Quarterly Results
        Sep 13, 2019Oct 11, 2019
        Quarterly Results & Interim Dividend
      • Announced onEx-DateDividend%
        Oct 14, 2020Oct 23, 2020240%
        Apr 20, 2020May 29, 2020190%
        Oct 11, 2019Oct 23, 2019160%
        Apr 12, 2019Jun 13, 2019210%
        Jan 11, 2019Jan 24, 201980%
      • Announced onEx-Date
        Oct 10, 2014Dec 02, 2014
        Bonus Ratio: 1 share(s) for every 1 shares held
        Apr 14, 2006Jul 13, 2006
        Bonus Ratio: 1 share(s) for every 1 shares held
        Jan 25, 1999Feb 08, 1999
        Bonus Ratio: 1 share(s) for every 1 shares held
        Jun 18, 1997Aug 19, 1997
        Bonus Ratio: 1 share(s) for every 1 shares held
        Jun 30, 1994Aug 19, 1994
        Bonus Ratio: 1 share(s) for every 1 shares held
      • Announced onEx-Date
        Nov 30, 1999Jan 24, 2000
        Split: Old FV10.0| New FV:5.0
      • No Data Available

      • Announced onMeeting on
        May 15, 2020Jun 27, 2020
        -
        Apr 12, 2019Jun 22, 2019
        Book closure from Jun 15, 2019 to Jun 15, 2019
        Jul 18, 2018Aug 25, 2018
        -
        Apr 13, 2018Jun 23, 2018
        Book closure from Jun 16, 2018 to Jun 16, 2018
        Jan 04, 2018Feb 24, 2018
        -

      About

      Infosys Ltd., incorporated in the year 1981, is a Large Cap company (having a market cap of Rs 479801.42 Crore) operating in IT Software sector.

      Infosys Ltd. key Products/Revenue Segments include Software Development Charges which contributed Rs 78809.00 Crore to Sales Value (99.69 % of Total Sales) and Software Products which contributed Rs 238.00 Crore to Sales Value (0.30 % of Total Sales)for the year ending 31-Mar-2020.

      For the quarter ended 30-09-2020, the company has reported a Consolidated sales of Rs 24570.00 Crore, up 3.82 % from last quarter Sales of Rs 23665.00 Crore and up 8.58 % from last year same quarter Sales of Rs 22629.00 Crore Company has reported net profit after tax of Rs 4858.00 Crore in latest quarter.

      The company’s top management includes Dr.Punita Kumar Sinha, Mr.D N Prahlad, Mr.D Sundaram, Mr.Michael Gibbs, Mr.Nandan M Nilekani, Mr.Salil Parekh, Mr.U B Pravin Rao, Ms.Kiran Mazumdar Shaw. Company has Deloitte Haskins & Sells LLP as its auditors. As on 30-09-2020, the company has a total of 4,259,411,598 shares outstanding.

      About Infosys

      Infosys Ltd., incorporated in the year 1981, is a Large Cap company (having a market cap of Rs 479801.42 Crore) operating in IT Software sector. Show More

      Key Indices Listed On

      Nifty 50, S&P BSE Sensex, Nifty IT, Nifty 100, Nifty 200

      Address

      No. 44, Hosur Road,Electronics City,Bengaluru, Karnataka - 560100

      Executive Leadership

      AG

      A G S Manikantha

      Co. Secretary & Compl. Officer
      AG

      A G S Manikantha

      Secretary
      DN

      D N Prahlad

      Independent Director
      DS

      D Sundaram

      Independent Director
      Show More

      Auditors

      Deloitte Haskins & Sells LLP

      Infosys Share Price Update

      Infosys Ltd. share price moved down by -1.27% from its previous close of Rs 1,140.90. Infosys Ltd. stock last traded price is 1,126.45

      Share PriceValue
      Today/Current/Last1,126.45
      Previous Day1,140.90

      DATA SOURCES: TickerPlant (for live BSE/NSE quotes service) and Dion Global Solutions Ltd. (for corporate data, historical price & volume, F&O data). Sensex & BSE Quotes and Nifty & NSE Quotes are real-time and licensed from BSE and NSE respectively. All timestamps are reflected in IST (Indian Standard Time).

      DISCLAIMER: Any and all content on this website including tools/analysis is provided to you only for convenience and on an “as-is, as- available” basis without representation and warranties of any kind. The content and any output of such tools/analysis is for informational purposes only and should not be relied upon or construed as an investment advice or guarantee for any specific performance/returns advice or considered as recommendation for the purchase or sale of any security or investment. You are advised to exercise caution, discretion and independent judgment with regards to the same and seek advice from professionals and certified experts before taking any decisions.

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      Markets Data

      *

      Key Metrics

      • This is a ratio arrived at by dividing the current market price of a stock by its latest (annual or annualized) earnings per share. Here we have taken the TTM (trailing twelve months) adjusted earnings per share.

      • Earnings per share (TTM) tells the profit after tax earned on a per share basis by a stock over the last twelve months or four quarters.

      • MCap or Market capitalization of a stock is calculated by multiplying the total number of shares outstanding of that particular stock with its current market price.

      • This is the ranking of a company within its sector based on MCap or Market capitalization. Higher the market capitalization of a company, higher the rank it is assigned.

      • Price to Book represents the ratio of current market price of a stock to its book value per share. The book value itself is arrived at by dividing the net worth of a company by the total number of shares outstanding of the company at that time.

      • Dividend Yield calculates the amount of full year dividend declared by a company as a percentage of the current market price of a stock. All other things being equal, higher the dividend yield of the stock, the better it is for investors.

      • Face value of a stock is the value ascribed to the stock as per the balance sheet of the company. The dividend declared by a company is usually declared as a percentage of face value.

      • Beta (β) is a measure of systematic risk. It describes the responsiveness of a stock to fluctuations in the market. Beta coefficient of more than 1 denotes that a security is more volatile than its benchmark and less than 0 signifies that security return is not correlated to market movement.

      • Volume Weighted Average Price represents the average price of a security over a particular time period (example one trading day) weighted by the volume traded at each price point.

      • This represents the 52 week high and low price of the security. It is also the 1 year high and low of the security. This represents the highest and lowest price touched by the security during the past 52 weeks or 1 year including today.

      • Book value represents the value arrived at by subtracting the total liabilities from the total assets of the company. On dividing this value with the total number of shares outstanding for the company, we can arrive at book value per share. Book value is also known as Net Asset Value of a company.

      • This is a ratio of market capitalisation of a company’s stock to its annual sales. The market capitalization here is taken for the fully paid-up equity share of the company.

      Technicals

      • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

        Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

        Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

        Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      • Pivot points are indicative support and resistance levels which are calculated on basis of previous day’s high, low and closing prices. Pivot level for Monday’s trade would be based on Friday’s prices and Monday’s, high, low and close price would go into calculation of pivot levels for Tuesday’s trading session.

        There are two underlying assumptions in pivot points. First, the specific price level indicated by R1, R2 and R3 may act as a barrier or resistance in an uptrend. So, if a stock moves up above these pivots levels, the uptrend gets confirmed. Second these specific price levels may see an increased activity, hence may be used as levels to book profit by traders with a long positions. For traders with short position, these points are often helpful in determining what should be the stop loss for a trade.

        Similarly, in case of support levels as indicated by S1, S2 and S3, they may act as price level where a stock might get a breather when it is slipping southward. In case these supports levels are broken it is a confirmation of a down trend. The stock may also see increased activity close to pivot levels. They may be used by trader may use them to put stop loss for a long trade. If a trader has short position, the pivot level may help in determine a level, where profit may be booked.

        Like any other technical indicator, pivots levels cannot and should not be used as single factor while taking a trading decision. They should be combined with other technical indicators. It could be short term moving averages, stochastic, moving average convergence divergence (MACD) or overbought level as indicated by relative strength index (RSI). For example, if a breakdown of support level (S1, S2 or S3) is accompanied with stock price also moving below its short term moving average or stochastic on daily charts giving a sell signal, it would add to weightage to the decision of taking a short trade.