The Hindu Business Line : Tata Steel in oversold zone

Tata Steel (Rs 379): The breach of the negative trigger level at Rs 390 resulted in a drop to the target zone of the Rs 375-380 range. The stock has now been pushed to extreme oversold zone and a relief rally may be just round the corner. A close above Rs 388 would help the stock move to the next resistance zone at the Rs 397-400 range. Considering that the share price has managed to hold above the support zone at the Rs 368-370 range, there is a case for a rally to the resistance at the Rs 397-400 band.

SBI (Rs 911): The stock went within striking distance of the target level of the Rs 875-885 range mentioned earlier. It rebounded off the low at Rs 891.5 recorded on Tuesday. The near-term trend remains bearish and a drop to the Rs 845-850 range appears likely. A close below Rs 889 would confirm this bearish outlook. Investors may hold with a stop-loss at Rs 889. An upward move in price may be used to reduce exposures. It could move to the long-term target zone of Rs 1150-1200 on completion of the corrective phase. Fresh exposures may be considered on evidence of support at Rs 845-850.

Reliance Ind (Rs 764): As observed last week, a drop below the negative trigger level of Rs 775 resulted in a sharp slide. The stock also dropped to the support zone at the Rs 755-760 range. The near-term trend remains bearish and a drop to the Rs 745-750 range appears likely. Investors may reduce exposures. As the long-term trend is positive, fresh exposures may be considered on price weakness. A close below Rs 738 would have major negative implications and would push the stock into a prolonged corrective phase.

Satyam Computer (Rs 571): Though the share price moved past the resistance level at Rs 590, it failed to hold ground and closed below this level. The near-term trend does not appear positive. A close below Rs 565 would confirm the weak outlook and a subsequent drop to the Rs 535-540 range is not ruled out. Hold with a stop-loss at Rs 564. Fresh exposures may be avoided.

Infosys (Rs 2,601): The price movement was in alignment with last week's expectations. The stock turned weak after moving close to our earlier target zone of the 2,650-2,700 range. The overall trend would remain subdued as the weekly charts indicate the continuation of the downtrend. Investors may reduce exposures on price rally. Aggressive traders may consider short positions on price rally, with a stop-loss at Rs 2,700. A drop below Rs 2,560 would push the stock to the Rs 2,440-2,450 range.

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Ashok Leyland (Rs 28): The stock moved in line with expectations. It, however, has managed to hold above the bearish trigger level at Rs 26.4. A close below this level would confirm the possibility of a drop to the Rs 24-25 range. Such price drops would be an opportunity to take exposures, as the long-term trend is bullish.

The stock appears to have the potential to move to the target zone of the Rs 36-38 range. Remain invested with a stop-loss at Rs 23. Fresh exposures may be considered on price weakness, with a stop-loss at Rs 23. Exposures may be enhanced on a close above Rs 30. Stop-loss may be placed at Rs 27 for exposures taken on a break above Rs 30.

IPCL (Rs 222.9): The price action was in alignment with last week's bearish trend. The stock ruled weak and also dropped to the target zone of the Rs 220-222 range. As the long-term trend is bullish, fresh exposures may be considered at lower levels. Evidence of support around the Rs 220-222 range may be used to take long positions, with a stop-loss at Rs 200. The long-term view is bullish and this would get negated on a close below Rs 200.

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