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SBI (₹2,423)
In the previous week, the stock of State Bank of India was choppy and fell around 1 per cent. This minor fall has not made any significant changes in the short-term outlook, which is a sideways movement. The stock could remain in this sideways consolidation phase for as long as it trades in the band between ₹2,350 and ₹2,600. A decisive fall below the lower boundary, which is also a key support level, can reinforce a bearish momentum and pull the stock down to ₹2,250 and then to ₹2,100 in the medium term. Traders with a short-term perspective should be cautious and initiate fresh short positions only on such a fall. Only a conclusive breakthrough of the ₹2,600 level can take the stock higher to ₹2,750 and then ₹2,850 in the medium term. Investors with a medium-term view should also stay cautious. Immediate resistance is at ₹2,500.
ITC (₹364)
Last week, the stock was volatile and declined 2 per cent as it witnessed selling pressure and profit-taking. As the stock is reversing after encountering a key resistance around ₹380, traders can consider taking the profits off the table at this juncture before the stock falls further. Though the short-term uptrend continues, its indicators in the daily chart illustrate that the trend is diminishing, backing the profit-booking. A decisive fall below the immediate base at ₹360 can pull the stock down to ₹350 or ₹345. This will indicate that the short-term trend has reversed. But a fall below ₹345 is needed to alter the medium-term uptrend. Therefore, investors with a medium-term perspective can consider holding the stock with a stop-loss at ₹345. Key supports below this level are at ₹335 and ₹330. Significant resistances are at ₹370 and ₹380.
Infosys (₹3,847.2)
Infosys surged 4.5 per cent with good volume, breaching the immediate resistance at ₹3,800 last week. The stock is testing the medium-term resistance between ₹3,800 and ₹3,850 with a positive bias. Therefore, investors with short-term and medium-term perspectives can consider buying the stock at current levels with stop-loss at ₹3,750 and ₹3,600, respectively. Targets on a strong close above ₹3,850 are at ₹3,900 and ₹4,000 levels. Both short- and medium-term trends are up for the stock. The relative strength index in the daily chart has entered the bullish zone from the neutral region while weekly RSI continues to feature in the bullish zone. A corrective decline can find supports at ₹3,750 or ₹3,600 levels. Make use of these declines to buy the stock. Next supports are at ₹3,550 and ₹3,450 respectively.
RIL (₹926.8)
The stock extended its decline marginally in the midst of volatility last week. The stock continues to trade well below its key immediate resistance at ₹960 and the 200-day moving average. Since the May 2014 peak of ₹1,142, the stock has been on a medium-term downtrend. Traders with a short-term perspective can consider holding their short position with a stop-loss at ₹955. It can decline to ₹915 and ₹900 in the week ahead. A decisive breakthrough of the significant support at ₹900 can drag the stock down to ₹870 and ₹850 in the medium term. Hence, investors with a medium-term outlook can stay on the sidelines and re-enter at a later stage. A strong move beyond the ₹960 resistance can take the stock to ₹980 or ₹1,000. But this will only be a corrective rally. A strong rally above ₹1,040 is required to reverse the downtrend.
Tata Steel (₹448.7)
Tata Steel plunged 5 per cent in line with our expectations in the prior week. The short-term trend has been down for the stock from the key resistance level of ₹570. Moreover, it is trading well below its 21-day and 50-day moving averages. The indicators in the daily chart continue to feature in the bearish zone, backing the downtrend. The stock is now testing a key support as well as 200-day moving average at ₹450. A conclusive breakthrough of this support is needed for further declines. Traders can wait and initiate fresh short positions on such a fall with a stop-loss at ₹470. A strong tumble can drag the stock down to the levels of ₹426, ₹410 and ₹400 in the medium term. Investors with a medium-term horizon can stay on the sidelines. Resistances are placed at ₹480, ₹500, ₹510 and ₹530 levels.
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