The Hindu Business Line : Pivotals: Reliance Industries (Rs 1,931.2)

RIL took the downward trajectory last week and closed 116 points lower. The stock is sustaining below the 50-day moving average for the second consecutive week and its 10-day rate of change oscillator has been declining deep in to negative territory.

This indicates that the stock is in a medium-term down-trend that can prolong. Targets for the C wave from the Rs 2,490 top are Rs 1,827 and Rs 1,532. Presence of 200-day moving average at Rs 1,805 makes the first target critical.

Short-term trend in the stock is down but it has strong support around Rs 1,900 from where a bounce to Rs 2,080 or Rs 2,125 is possible.

Failure to move above the first support will be the cue for initiating fresh short positions.

SBI (Rs 2,191)

SBI plummeted to an intra-week low of Rs 2,118 by Wednesday before making an attempt to stabilise itself. A three-wave zigzag from March lows appears to have been completed at the recent peak of Rs 2,500. Minimum target of the decline that will now follow is Rs 1,900 with the 50-day moving average at Rs 2,044 providing some interim support.

Near-term resistances for SBI are at Rs 2,270 and Rs 2,360. A close above the second resistance is required to mitigate the bearish outlook. Reversal below the first resistance will drag the stock to Rs 2,062 or Rs 1,918.

Tata Steel (Rs 471.6)

The 11 per cent cut received by Tata Steel last week has marred the medium-term outlook and has opened the possibility of the termination of the up-trend that began from the March low of Rs 148. It needs to be noted that Tata Steel is one of the underperformers among the pivotals since it has retraced only half the losses made in 2008 while some of its peers are perched well above their 2008 peaks.

But the stock has already retraced 30 per cent of the move made since the March trough completing the minimum retracement requirement for a correction. The decline can halt here.

If it continues, next target would be Rs 427.

Short-term trend in the stock is down and rallies will face resistances at Rs 515, Rs 530 and Rs 548. Reversal from the first resistance will give traders the perfect place to initiate fresh short positions.

Infosys (Rs 2,205.4)

Infosys bore the bear’s onslaught pretty well last week, recording a mild weekly decline of 2 per cent. Immediate support for the stock is at Rs 2,120 and the short-term trend will turn down only on a close below this level. Subsequent targets remain at Rs 1,936 or Rs 1,906.

Key resistance for the week is at Rs 2,318 and investors ought to stay wary as long as the stock trades below this level. Strong move above Rs 2,415 is needed to make the outlook gung-ho once again.

ONGC (Rs 1,132.7)

ONGC too fared relatively better last week and closed with a mild Rs 42 loss.

The stock has, however, closed below the 50-day moving average at Rs 1,179 and the oscillators in both the daily as well as the weekly chart denote bearishness.

Fresh shorts are however recommended only on a decline below Rs 1,120. Next target is Rs 1,080.

Medium-term view will stay negative as long as the stock trades below Rs 1,200. Medium-term target on a decline below Rs 1,080 is Rs 965.

Maruti Suzuki (Rs 1,403)

Maruti wasn’t spared from the sell-off last week and the stock closed 7 per cent lower. Rallies would face strong resistance at Rs 1,500 and Rs 1,525. Medium-term target if the decline continues is Rs 1,250. — Lokeshwarri S.K.

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