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Reliance (Rs 862.1)
RIL edged higher in the first four sessions of the week to the intra-week peak of Rs 907. But it could not move above this level, in line with our expectation and gave up all the gains on Friday. Critical short-term support is at Rs 856. Targets on a breach of this support are Rs 834 and Rs 828. Resistances for the days ahead will be at Rs 876, Rs 888 and Rs 907. Fresh short positions can be initiated if the stock reverses from either of these levels.
The medium-term trend in the stock is down while the long-term trend is sideways between Rs 850 and Rs 1200. The stock is currently testing the lower boundary of this range. Next downward targets for the medium-term are Rs 828 and Rs 741.
State Bank of India (Rs 2,421.1)
SBI recorded minor gains in all five sessions of last week to end 6 per cent higher. The stock moved slightly above our second target to record the intra-week peak of Rs 2,433. Immediate resistance for the stock is at Rs 2,440. Inability to move above this level will be the cue for traders to short the stock with stop at Rs 2,460. Targets would then be Rs 2,313 and Rs 2,241. Conversely, strong move above Rs 2,440 will give the next targets at Rs 2,540 and Rs 2,640.
The medium-term trend in the stock is down since last November. SBI retraced half the gains made since March 2009 when it recorded the recent low at Rs 2,120. The medium-term trend will turn positive only on close above Rs 2,657. Else the stock can decline to the next medium-term support at Rs 1,898.
Tata Steel (Rs 602)
Tata Steel too recorded a stellar rally to the intra-week peak of Rs 617. But the sell-off on Friday dragged the stock down to Rs 600 again. Immediate resistance for the stock is at Rs 612 and the stock could not sustain above it on Friday. Failure to move above this level early next week will take the stock lower to Rs 591 or Rs 575 in the days ahead. Traders can, therefore, initiate fresh short positions on failure to cross Rs 620 early next week.
On the other hand, rally above Rs 620 will take the stock higher to Rs 632 and Rs 651. Medium-term trend in Tata Steel is down but the stock bounced off key medium-term support at Rs 548 in June. Investors need not fret as long as the stock trades above this level. Traders with greater penchant for risk can also buy the stock every time it moves near this level.
Infosys (Rs 2,934.3)
Infosys too moved close to the key short-term resistance at Rs 2,979 before turning jittery on Friday. Near-term prospect of the stock hinges on whether it is able to move above this level in early next week. Inability to do so will pull it lower to Rs 2,850 or Rs 2,780 in the near-term. But close above Rs 2,979 will pave the way for rally to Rs 3,077 or Rs 3,176.
The stock bounced off the key medium-term support zone between Rs 2,600 and Rs 2,700 in June. This rally can now extend to Rs 3,177 or even Rs 3,500. However, failure to cross Rs 3,000 will imply that the down trend will intensify over the medium-term dragging the stock lower to Rs 2,580 or even Rs 2,290.
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