The Hindu Business Line : Pivotals: Reliance Industries (Rs 2,116.7)

Reliance rallied strongly and closed above the key resistance if 2,100 indicated in our last column. We would however wait for a firm close above Rs 2,150 before assuming that the medium-term view has turned neutral. Presence of both the 21 and 50 day moving averages in the zone between Rs 2,050 and Rs 2,150 makes it a very critical resistance zone. Strong move above this band would imply an impending rally towards Rs 2,300 or Rs 2,400 again.

If we consider the long-term chart, RIL faces key resistance at 2,400 which is 61.8 per cent retracement of the decline in 2008. The sideways move between Rs 1,700 and Rs 2,400 could be the second leg of the up-move from the March trough with the third leg upward set to unfurl over the ensuing months taking the stock to Rs 2,770 or higher over the medium term.

SBI (Rs 2,298)

SBI moved in line with our expectation to the intra week peak of Rs 2,395. Though the stock moved briefly above the key short-term resistance of Rs 2,335, it could not sustain above that level for long and reversed lower on Thursday. Supports for the week ahead would be available at Rs 2,267 and Rs 2,187. Short-term traders can hold their longs as long as the stock holds above the second support.

Decline below Rs 2,187 would imply that the down-trend that began from the peak of Rs 2,500 is extending and the stock could decline to Rs 2,113 or even Rs 1,953.

Tata Steel (Rs 521.2)

Tata Steel moved up to our short-term target of Rs 529 on Wednesday and moved tantalisingly around this level for the rest of the week without making a clear move in either direction. As indicated last week, reversal from here will imply that the medium term trend continues to be down and the stock can decline to the zone between Rs 405 and Rs 420 once more. However, if the uptrend continues, the stock can head towards Rs 560 or Rs 660 over the medium-term.

Short-term traders can hold the stock with a stop at Rs 490. Next support for the week would be at Rs 470. Fresh purchases are not recommended if the stock declines below Rs 470.

Infosys (Rs 2,358.8)

Infosys made a surprise lunge to move higher to the intra-week peak of Rs 2,371. Since the stock has moved above the key short-term resistance at Rs 2,320, it can now rise to its former peak of Rs 2,415. Short-term traders can hold their long positions until the stock trades above Rs 2,275. Some profit can be booked close to the stock’s former peak since a reversal from that level can drag the stock down to Rs 2,100 again.

ONGC (Rs 1,183.5)

The impediment at Rs 1,200 blocked ONGC’s progress last week. As indicated in our last column, a strong move past Rs 1,210 is needed to mitigate the bearish short-term bias. Fresh purchases are therefore recommended only on a rally above Rs 1,210 with the short-term target of Rs 1,270.

Maruti Suzuki (Rs 1,479.8)

Maruti Suzuki witnessed two-way movement last week with the stock first falling to the intra-week low of Rs 1,366 only to recover smartly on Friday to erase all the losses. Key resistance for the short-term is at Rs 1,520 and fresh longs should be initiated only on a move above this level. Medium-term supports stay at Rs 1,368 and Rs 1,250. — Lokeshwarri S.K.

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