SBI (₹2,755.2)

After an initial struggle, SBI decisively broke through its key long-term resistance at ₹2,500 on Friday, helped by better than expected March 2014 quarter results. The stock zoomed more than 9 per cent in that session, taking its weekly gains to 14 per cent. This breakthrough is positive from a long-term perspective. However, for the short-term, the outlook appears bleak as the stock is facing resistance next in the band between ₹2,800 and ₹2,850. Further, the stock’s daily and weekly indicators are featuring in the overbought levels signalling that a near-term correction is on the cards. Therefore, traders with a short-term perspective should tread with caution in the expiry week ahead. A downward reversal from the aforementioned resistance band can pull the stock down to ₹2,600 and then to ₹2,500 in the near-term. Subsequent key supports are pegged at ₹2,300 and ₹2,100 levels. Conversely, a strong breakout of ₹2,800 and ₹2,850 resistance band can see an up move to the psychological resistance level of ₹3,000 levels. Investors with a medium term perspective can consider holding the stock with a revised stop-loss at ₹2,250.

ITC (₹342.1)

The stock fell 4 per cent while the broader indices and most of the large cap stocks witnessed gains in the previous week. This decline has taken the shape of bearish engulfing candlestick pattern in the weekly chart indicating continuation of the down-move. The short-term trend has been down for the stock since registering an all-time high at ₹386.7 on May 16. It recently breached its 21- and 50-day moving averages and is hovering below them. Currently, the stock is testing its support at ₹340. Strong fall below the level will be cue for initiating short position with a stop-loss at ₹340. This will mar the medium term up trend of the stock. The short term targets are ₹325 and then ₹310. Investors with a medium term horizon can remain on the sidelines and buy at lower levels. Only a strong move above ₹355 will alter the short term downtrend and take the stock northwards to ₹365 and ₹375 levels.

Infosys (₹3,066.5)

Volatility existed in Infosys and the stock fell 3.5 per cent in the previous week. Both the medium and short-term trends are down for the stock. It has been testing and hovering at a key support level in the ₹3,000-3,050 band over the past three weeks. The stock is trading well below its 50- and 200-day moving averages. Indicators in the daily chart are about to enter the bearish zone from the neutral region. A decisive fall below the support band will strengthen the stock’s bearish momentum and drag it lower to ₹2,900 and then to ₹2,800 in the forthcoming weeks. Traders with a short-term perspective should tread with caution as long as this support band holds and a strong fall will be cue for shorting. Significant resistances are placed at ₹3350 and ₹3,450 levels. Subsequent resistance is at ₹3,550. Investors with a medium-term perspective can desist from buying the stock at this juncture.

Reliance Industries (₹1,127.8)

RIL extended its up-move by gaining 4.4 per cent last week. The medium-term trend has been up for the stock since taking support at ₹800 in February 2014. From early May, the short-term trend has been up. RIL is trading well above its 50 and 200-day moving averages. But, it now faces a key resistance ahead at ₹1,150 levels. A conclusive breach of this level will push it higher to ₹1,200. Key resistance above ₹1,200 is at ₹1,300. Inability to move above ₹1,150 will confine the stock to moving sideways in the band between ₹1,050 and ₹1,150. Key supports below ₹1,050 are pegged at ₹1,000 and ₹950 levels. The indicators in the daily chart are losing bullish momentum and those in the weekly chart are featuring in overbought levels indicating that correction is due. Hence, traders with short-term perspective should trade with caution in the coming week. Those with a medium-term perspective can consider holding their long position with a stop-loss at ₹925 levels.

Tata Steel (₹477.5)

Tata Steel stayed above its key support level of ₹430 and gained 8 per cent in the week ago. This rally has emphatically cleared a key resistance at ₹450 and the stock has moved to a higher trading zone. Only a strong weekly close below ₹450 will alter this trading zone. Traders can continue holding their long positions with a stop-loss at ₹450. The stock can move higher to ₹500 in the coming sessions. Conversely, a fall below ₹450 will signal selling pressure and drag the stock down to ₹430 in the same time period. Next supports are at ₹410 and ₹400 levels. Both medium as well as short-term trends are up for the stock. Important resistance above ₹500 is at ₹520. Investors with medium-term perspective can hold the stock with a stop-loss at ₹390.

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