Reliance Industries (Rs 813.3)

The stock was volatile in the previous week and is still trading in the sideways consolidation range between Rs 760 and Rs 820. It is testing the upper boundary and its 200-day moving average at current levels. A decisive move above Rs 820 will push the stock higher to Rs 840 and then to Rs 860 in the short-term. In that scenario, traders with short-term perspective can initiate fresh long positions with fixed stop-loss at Rs 820. Strong rally beyond Rs 880 will take the stock to Rs 900-920 range in the medium-term.

However, conclusive decline below the lower boundary of the aforementioned sideways range will pull the stock down to Rs 740 in the medium-term. Important supports for the week ahead are positioned at Rs 790 and Rs 760.

State Bank of India (Rs 2,305.9)

Last week, the stock gained 4 per cent with good volume, moving contrary to our expectations. The daily relative strength index is on the brink of re-entering the bullish zone from the neutral region. Nevertheless, the stock is testing key resistance at Rs 2,300 and faces next resistance immediately at Rs 2,340 levels. An emphatic breakthrough of these resistances will reinforce bullish momentum and take the stock higher to Rs 2,400 and to Rs 2,450 in the forthcoming weeks. Traders can initiate fresh long position in that case with tight stop-loss at Rs 2,300. Next resistance above Rs 2,450 is at Rs 2,550 levels.

On the downside, the stock has immediate support at Rs 2,200. A strong decline below this level will pull it down to Rs 2,150 and then Rs 2,080-2,100 band in the short-term.

Infosys (Rs 2,362.1)

The stock has been on a near-term uptrend for the past two weeks. It extended its gains in the previous week by advancing 2.4 per cent. Having said that, the stock is facing significant resistance at Rs 2,400 levels. Short-term traders should tread with caution as long as the aforesaid resistance is not broken. A strong breakthrough of the resistance will pave the way for a rally to Rs 2,500 in the week ahead.

Only a strong up move beyond Rs 2,600 will alter the stock’s medium-term downtrend and push it further upwards to Rs 2,700 in the medium term. Significant immediate supports are positioned at Rs 2,300 and Rs 2,200.

Tata Steel (Rs 318.8)

The stock continued its upward momentum in the week ago by gaining 2.4 per cent with good volume. Its daily indicators are showing positive divergence indicating a potential trend reversal in the near future. Taking a contrarian view, we are optimistic on the stock from a short-term perspective. Short-term traders can prolong holding their long positions with stop-loss at Rs 305. A decisive up move beyond Rs 320 can accelerate the stock higher to Rs 335 or to Rs 345 in the upcoming weeks. Next important resistance is pegged at Rs 365 levels.

Strong rally above Rs 390 is required to alter the stock’s medium-term downtrend and take the stock northwards to Rs 420 levels.

But a decline below the key immediate support at Rs 300 can pull the stock down to Rs 270 in the medium-term.

(This article was published on May 11, 2013)
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