RIL moved out of its near-term sideways consolidation by gaining more than 2 per cent last week. Medium and short-term trends are up for the stock. However, the stock is currently testing its key resistance at Rs 860. Traders with a short-term perspective can consider holding their long holdings with stop-loss at Rs 847. An emphatic rally above the aforesaid resistance will take the stock higher to Rs 880 and Rs 900 in the coming weeks. Key supports for the stock are at Rs 840 and Rs 820. A fall below Rs 810 will mitigate the stock’s short-term uptrend and pull it down to Rs 790 or Rs 770.

Medium-term uptrend will be in place as long as the stock hovers above Rs 750. Investors with a medium-term perspective can continue holding the stock with stop-loss at Rs 740. Strong rally above Rs 900 will take the stock northwards to Rs 950.

State Bank of India (Rs 2,484.8)

The stock zoomed 4.5 per cent last week, but is facing significant long-term resistance at Rs 2,500. Traders with a short-term perspective can consider taking partial profits off the table at this juncture and re-enter on a strong breakthrough of Rs 2,500. Resistances above Rs 2,500 are at Rs 2,560 and Rs 2,600. The stock is testing the upper boundary of daily Bollinger bands implying over-brought. Failure to rally above Rs 2,500 will lead to near-term corrective decline and the stock can decline to Rs 2,400 or Rs 2,350 levels. Only a strong fall below Rs 2,240 will mar the stock’s short-term uptrend. Key supports below Rs 2,240 are positioned at Rs 2,125 and Rs 2,060 levels.

Medium-term trend remains up for the stock as long as it trades above Rs 2,060 levels. If this level holds, the stock can trend upwards and reach Rs 2,750 in the medium-term.

Infosys (Rs 2,348.3)

The stock finished the week on a positive note by gaining just over one per cent. The stock could witness a volatile week ahead as the company is scheduled to announce its December 2012 quarter results on January 11. Its significant long-term support in the band between Rs 2,250 and Rs 2,300 is cushioning the stock, but the stock has important resistance in the range between Rs 2,400 and Rs 2,450 which has to be cleared to chart an uptrend. Therefore, traders should tread with caution in the upcoming week.

Strong jump above Rs 2,450 will accelerate the stock higher to Rs 2,550 and then to Rs 2,650 in the medium-term. A decisive fall below Rs 2,250 will reinforce bearish momentum and drag the stock down to Rs 2,125 levels.

Tata Steel (Rs 433.4)

After testing resistance at Rs 440, the stock fell almost 2 per cent on Friday. Traders can book partial profits and tread with caution as long as the stock trades below this resistance. The stock can decline to its immediate support at Rs 420 and then to Rs 410. Only a strong slump below Rs 400 will alter the stock’s short-term uptrend.

Investors with a medium-tem perspective can make use of this decline to buy the stock with stop-loss at Rs 390. A break out of the key resistance at Rs 440 will push the stock to Rs 460 and Rs 480 in the medium-term.

(This article was published on January 5, 2013)
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