The Hindu Business Line : Bearish outlook for Tata Steel

SBI (Rs 811): The stock breached the support zone at Rs 845-850. Typically, the trend would accelerate when a support or resistance level is broken convincingly. This concept was captured in the price action of this stock. With the stock failing to hold above the support level, the downward momentum gathered steam. The outlook remains bearish and a drop to support level at Rs 785-790 appears likely. A close below Rs 784 would push the stock to the next target zone of Rs 750-760. Short positions may be considered on the evidence of resistance around the Rs 845-855 range, with a stop-loss at Rs 862.

Reliance Ind (Rs 742): Despite the weak trend, the stock managed to hang above the crucial support level at Rs 735. As observed last week, a close below this level and a subsequent could lead to a potential "head and shoulder" pattern having negative implications. This would push the stock to the Rs 680-690 range. Remain invested with a stop-loss at Rs 733. Short positions may be considered by aggressive traders on a rally to the resistance zone at the Rs 755-760 range, with a stop-loss at Rs 765.

Tata Steel (Rs 331): The expected pullback rally failed to materialise, resulting in the stock sliding sharply during the week. The medium-term outlook has turned bearish and the stock could see a sharp slide on a close below Rs 328. This would confirm the formation of a bearish "double top", with a probability of a drop to the Rs 250-260 range. Hold with a stop-loss at Rs 328. Fresh exposures may be avoided while exposures may be pared on rally. Short positions may also be considered on rally with a stop-loss at Rs 350.

Satyam Computer (Rs 573): The stock moved to the target zone at the Rs 610-615 range and turned weak subsequently. The stock faces resistance at Rs 582-585 and support at Rs 565-570. A close below Rs 564 would push the stock to Rs 545-550. After a brief rally, we expect the share price to drop to the support zone at Rs 545-550. Short positions maybe considered on price rise, with a stop-loss at Rs 595.

Infosys (Rs 2417): Though the stock inched up towards our target zone of the Rs 2620-2650 range on Tuesday, the move was not convincing. The trend turned weak and the stock dropped below a crucial support level at Rs 2434 on Friday. The short-term has turned weak and would remain so unless the stock manages to close above Rs 2440 in the next couple of days. A failure to do so would push the stock to the Rs 2317-2320 range. Look to reduce exposures while short positions may be considered on rally, with a stop-loss at Rs 2470.

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ACC (Rs 434): The stock ruled weak as anticipated last week. It, however, failed to move towards the short-term resistance zone at Rs 465-470. After touching a high of Rs 456 on Tuesday, the stock turned weak in the remaining three trading days. The near-term trend remains bearish and a drop to the Rs 425-430 range appears likely.

Investors may look to reduce exposures on price rally. The bearish view would be negated only on a close above Rs 470. Short positions may be considered on evidence of resistance at around Rs 445-447, with a stop-loss at Rs 456. On the other hand, evidence of support at around Rs 425-430 may be used to take long positions with a stop-loss at Rs 420.

IPCL (Rs 211.6): The stock failed to hold above the stop-loss level at Rs 219. This has effectively negated the earlier positive outlook. The short-term outlook has now turned bearish. A drop to the Rs 190-195 range appears likely. This view would be valid as long as the stock trades below the resistance level at Rs 220.

A close above Rs 220 is the minimum requirement to reinstate positive sentiment. Shareholders may remain invested with a stop-loss at Rs 209. Fresh short positions may be considered on rally, with a stop-loss at Rs 221. Holders of short positions may employ a trailing stop-loss if the stock continues to seek lower levels.

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