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After testing our first target of Rs 1,055, the stock retreated on Friday witnessing selling pressure. Inability to rally beyond Rs 1,055 will signal that the stock could slip to Rs 1,015, Rs 990 or Rs 956 in the ensuing days. Therefore, short-term traders should tread with caution. Only a strong dive below Rs 1,015 will be a signal for initiating fresh short positions. However, a decisive move above Rs 1,055 will lift the stock higher to Rs 1,076 or Rs 1,090.
In the medium-term, the stock continues to be moving sideways in the broad range between Rs 880 and Rs 1,160. Emphatic rally above Rs 1,090 will take the stock higher to Rs 1,150-1,160 range and then to Rs 1,200 in the medium-term. Key medium-term support for the stock is at Rs 880.
State Bank of India (Rs 2,719.5)
The stock did volte-face on Thursday and formed a bearish engulfing candlestick pattern, signalling short-term bearishness. It however gave away most of its initial gains, finishing the week marginally higher. Traders can initiate fresh short position while maintaining stop loss at Rs 2,780. Downward targets for the stock are Rs 2,650 and then Rs 2,565. SBI is likely to trade sideways in a narrow band between Rs 2,460 and Rs 2,820.
The stock appears to have resumed its medium-term downtrend as it reversed lower after testing the key level Rs 2,875. Break through of an important medium-term support at Rs 2,500 will reinforce its downtrend and pull it down to Rs 2,200 and Rs 1,900 in the medium-term. Conversely, a strong close above Rs 2,875 will signal that the stock can head to Rs 3,100 level in the upcoming months.
Tata Steel (Rs 625.6)
Tata Steel gradually inched higher and ended the week with 2 per cent gains. The fact that the stock's gradual up move has been backed by low volumes signals cautiousness. Hence, short-term traders should tread with caution and take profits off the table, if the stock fails to move above Rs 640 in the ensuing weeks. A reversal from this level can pull the stock down to Rs 610 or Rs 600. Next supports are at Rs 592 and Rs 575.
On the other hand, strong jump above Rs 640 will take the stock higher to Rs 660, a key medium-term resistance level. Strong close above Rs 660 is required to mitigate the downtrend that has been in place since this January.
Infosys Technologies (Rs 3,218.2)
The stock advanced 1.8 per cent last week in line with our expectations and achieved our first target of Rs 3,204. Short-term traders can hold their long positions with stop loss at Rs 3,140. Upward targets are Rs 3,276 and Rs 3,318. The stock is hovering well above its 21 and 50-day moving averages. Supports for the week ahead is at Rs 3,100, Rs 3,014 and Rs 2,900.
The stock is currently hovering just below its medium-term trend deciding level of Rs 3,276. Failure to move above this level will pull the stock down to Rs 3,100 in the medium-term. Strong move above Rs 3,276 will mitigate the stock's medium-term bearishness and take it higher to Rs 3,400 or Rs 3,450 in the coming months.
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