In line with our expectation, Reliance Industries failed to move above the resistance level of Rs 1,040 and declined 5.6 per cent last week. It has conclusively closed below Rs 994 signalling that the stock has turned negative. Since the April 1 peak of Rs 1,065, the stock has been on a short-term downtrend. It is currently pausing just above the support level of Rs 975; strong dive below this level will pull the stock lower to Rs 954 in the short-term.

Traders with a short-term perspective can go short on the stock with stop-loss at Rs 994.

Downside targets are Rs 954, Rs 936 and Rs 920. Key short-term resistances for RIL are positioned at Rs 1,011 and Rs 1,040. Next resistance is at Rs 1,065.

State Bank of India (Rs 2,805.6)

Last week, SBI moved slightly above the key medium-term resistance level of Rs 2,900. It, however, made a retreat signalling a false break-out and the stock slipped almost 2 per cent. Traders can initiate short position with stop-loss at Rs 2,850.

Targets are Rs 2,760 and Rs 2,720. The stock has significant short-term support in the band between Rs 2,700 and Rs 2,720. As long as this support band holds, the stock's short-term uptrend remains in place. This can once again lift the stock higher to Rs 2,900 in the near-term.

However, downward penetration of the aforementioned support band will mar the uptrend and drag the stock down to Rs 2,600 and Rs 2,500 in the ensuing weeks. An important resistance the range between Rs 2,900 and Rs 2,950 lies ahead.

Tata Steel (Rs 614.7)

The stock reversed lower and fell 2.2 per cent in the previous week. It breached its 21-day moving average initially and later on, the 50-day moving average indicating early signs of bearishness.

Short-term traders can consider holding their short positions while maintaining stop-loss at Rs 626. First target is Rs 606; a strong fall below this level will pull the stock lower to Rs 595 in the near-term. Key short-term resistance for the stock are at Rs 630 and Rs 640. Only a strong move beyond Rs 640 will take the stock higher to Rs 660.

Since its January peak of Rs 713, the medium-term trend for Tata Steel points downwards.

Drop below Rs 595 can pull the stock down to Rs 583. Next key medium-term support is at Rs 552.

Infosys (Rs 2,905.9)

The stock was choppy last week and ended almost at same levels. It continues to test its strong support around Rs 2,900. Since its January high of Rs 3,494, Infosys has been on a medium-term downtrend.

A decisive break through of support level at Rs 2,900 can reinforce the stock's downtrend and pull it to Rs 2,768 in the medium-term.

Therefore, traders should wait and watch for a decisive fall below Rs 2,900 before initiating fresh short positions. Conversely, turnaround from the current levels can lift the counter upwards to Rs 3,050 or Rs 3,150 in the near-term. Significant support below Rs 2,900 is at Rs 2,800.

Related Topics
comment COMMENT NOW