Layoffs impact: Infy stock sinks below 200-DMA after 8 months; what next?

Infosys share price outlook: Infy was seen testing the 200-DMA for the first-time since June 2024; technical chart hints at further 9% downside risk for the stock.

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With Monday's 3.6 per cent intra-day fall, Infosys was seen trading below its long-term (200-Day Simple Moving Average) for the first time since June 06, 2024, - i.e. a period of little more than 8 months. After withstanding the market weakness for the last three months, Infosys stock has plunged nearly 7 per cent so far in February.  Off late, Infosys has been in news for layoffs and deferred internal assessments in the company. According to reports, nearly 400 trainees were dismissed by the IT giant on February 07, 2025, after failing internal evaluations three times. Thereafter, rumours are swirling among current trainees, with fears that around 4,500 more could meet the same fate.  Last week, close on the heels of an outcry over recent layoffs at the Mysuru campus, Infosys postponed internal assessments scheduled for trainees by a week. The company said that the deferment was aimed at giving the trainees additional time for preparation.  IT employee union Nascent Information Technology Employees Senate (NITES), however, claimed that the assessment meant for 800 trainees was postponed due to its intervention, "unwavering fight against unfair layoffs", as well as government action.    Meanwhile, on the bourses apart from the broader market weakness, this news flow seems to have impacted sentiment at the counter.  Here's a technical outlook on the stock, as it trades below the 200-DMA (Daily Moving Average), which now stands at Rs 1,783. CLICK HERE FOR THE CHART  Infosys  Current Price: Rs 1,755  Downside Risk: 8.9%  Support: Rs 1,729; Rs 1,670  Resistance: Rs 1,783; Rs 1,860  Technical chart shows that Infosys stock seems to be trading near oversold levels, as the 14-day RSI (Relative Strength Index) is seen nearing 30 levels. A RSI reading below 30 is considered oversold, while a reading above 70 is considered overbought.    Having said that, other key momentum oscillators on the weekly and monthly time-frames are in favour of further downside. Thus, the stock may witness downward pressure as long as it trades below Rs 1,783. On the downside, the stock can slide to Rs 1,600 levels, with near support for the stock seen at Rs 1,729 and far-off support at Rs 1,670. The overall bias for the stock is expected to remain negative as long as the stock trades below Rs 1,860.