Reliance Industries (Rs 868.4)

RIL plunged 8 per cent last week, breaching its immediate key support at Rs 900. The stock resumed its short-term downtrend last Monday by breaching its 21-day moving average and it is trading well below 21- and 50-day moving averages. As long as the stock trades below Rs 965, the short-term downtrend remains in place. It has just breached the lower range of its medium-term key support band between Rs 880 and Rs 900. We notice that there is an increase in volumes over the past four trading sessions. However, the stock is testing its support band, and one more weekly close below Rs 880 will confirm resumption of its medium-term downtrend and make way for it to trend lower. In that case, the stock can decline to Rs 825 and then to Rs 740 in the medium term.

A reversal from current levels can take the stock higher to Rs 900 and then to Rs 920 in the short term. Short-term traders should tread with caution in the upcoming week. Key immediate support is at Rs 840.

State Bank of India (Rs 2211.1)

The stock fell 1.7 per cent in the previous week and is testing its significant support band between Rs 2,150 and Rs 2,200. The stock is hovering at crucial levels. Therefore, traders with a short-term perspective should wait for the stock to move in a direction before initiating fresh positions. An upward bounce from the support band can lift the stock higher to Rs 2,300 or Rs 2,350 in the ensuing days. Significant medium-term resistance is at Rs 2,500. Nevertheless, a conclusive close below Rs 2,150 will strengthen the downtrend and pull the stock down to Rs 2,050- Rs 2,000 zone in the short term. The stock continues to be in a medium-term downtrend. Only an emphatic move above Rs 2950 can mar this trend.

Tata Steel (Rs 572.2)

Tata Steel’s 3.5 per cent jump with an upward gap on Friday helped it recover its loss in the early part of the week and finish the week on a positive note. However, the short-term trend is still down and the stock’s down trendline is in place. There is an increase in daily volume traded. It has once again bounced up taking support around Rs 555. Its daily moving average convergence divergence indicator is displaying a positive divergence. But, a strong move above Rs 585 is required to breach the down trendline and that will be the positive sign for initiating fresh long positions. In that scenario, the stock can trend higher to Rs 600 and Rs 615 in the upcoming weeks.

Failure to move beyond Rs 585 will pull the stock down to Rs 560 or Rs 550 levels in the near term. Strong decline below Rs 550 can reinforce its medium-term downtrend and accelerate the stock lower to Rs 530 in the coming weeks.

Infosys (Rs 2764.4)

Infosys retreated more than 3 per cent last week. The stock failed to move above Rs 2,900 and slipped lower breaching its 21-day moving average. It is currently testing its immediate support at Rs 2,750. The stock appears to have resumed its medium-term downtrend. Short-term traders can initiate fresh short position if the stock fails to move above Rs 2,830 levels with a stiff stop loss. Downside targets are Rs 2,700 first and Rs 2630 later. Significant resistances ahead are at Rs 2,900 and Rs 3,000.

Strong move above Rs 3,200 will mitigate the stock’s medium-term downtrend that has been in place since its January high this year.

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