RIL continued its volatile movement and its short-term trend is still down. However, the stock took support in the zone between Rs 770 and Rs 780 and bounded up, recovering most of the previous week losses. Short-term traders should tread with caution in the coming week as the stock is hovering at key trend-deciding area. Only a strong move above Rs 850 will alter the stock’s short-term downtrend. Next resistances above Rs 850 are positioned at Rs 870 and Rs 890. Further rally can push the stock higher to Rs 920 and then to Rs 940 in the medium-term.

Conversely, inability to rally beyond Rs 850 can pull the stock down to Rs 800 and then to Rs 770 and Rs 780 support band. An emphatic fall below this support band will pave the way for a decline to Rs 740 over the medium-term.

State Bank of India (Rs 1,559.4)

Last week, the stock was very choppy and formed a spinning top candlestick pattern in the weekly chart, indicating indecisiveness. After testing its significant support zone between Rs 1,500 and Rs 1,510, the stock is attempting to move higher. A positive divergence is evident in the daily relative strength index and price rate of change indicator, implying that trend reversal is on the cards. However, the stock needs to rally above Rs 1,640 and then Rs 1,710 levels. Traders with short-term perspective should tread with caution. But, a strong decline below Rs 1,500 will reinforce bearish momentum and pull the stock down to its next support positioned in the range between Rs 1,390 and Rs 1,400.

Important resistances above Rs 1,710 are pegged at Rs 1,800 and Rs 1,900. Medium-term trend has been down for the stock from its January peak of Rs 2,549 levels. This trend remains in place as long as the stock trades below Rs 2,000.

Infosys (Rs 2,998.5)

Infosys is still testing its significant resistance band between Rs 2,950 and Rs 3,000. A conclusive breakthrough of this resistance will push the stock northwards to Rs 3,225 in the medium-term. In that scenario, traders can initiate long positions with stop-loss at Rs 2,950. But a downward reversal from this resistance band and a strong decline below Rs 2,900 will pull it down to Rs 2,800 in the short-term. Next key supports are pegged at Rs 2,700 and Rs 2,600 levels.

Medium-term trend has been up of the stock from its April 2013 low of Rs 2,190 levels. This trend will stay in place as long as the stock trades above Rs 2,600 levels.

Tata Steel (Rs 282.2)

In the midst of volatility, the stock skyrocketed 20 per cent accompanied by extraordinary weekly volume in the week ago. Short-term trend has been up for the stock from its 52-week low of Rs 195, registered on August 7. It has breached its 21 and 50-day moving averages and is trading well above them. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI has entered the neutral region from the bearish zone. Traders can continue holding their long positions with stop-loss at Rs 265. Shot-term targets are Rs 300 and then Rs 320.

On the other hand, fall below its immediate support at Rs 260 can drag the stock down to Rs 245 or even to Rs 230 in the short-term. To alter its medium-term downtrend, the stock needs to move above Rs 350 levels.

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