Accenture warns on growth, Indian IT stocks tumbling — contrarian bounce play
Thesis
Indian IT companies like Infosys often follow the lead of Accenture because they compete for the same global contracts. When Accenture warned about slower growth, these stocks dropped sharply — but that might be an overreaction. These companies still have massive cash reserves and loyal clients, so a single warning from a competitor probably won't derail their whole business. When good stocks fall too far too fast on general fear, they often bounce back once the panic settles. This could be a chance to buy quality tech names at a discount.
Strategy approach
Build a rule-based mean-reversion strategy that enters long INFY on H4 when RSI(14) drops below 30 and the price is more than 2 standard deviations below its 20-day SMA. Exit when RSI crosses back above 50 or after a 10-day max hold. Use a 3% stop loss.