Technical Analysis

Pivotals: Reliance Industries (Rs 773.7)

Yoganand D. | Updated on March 30, 2013 Published on March 30, 2013





In a truncated week, RIL fell 4.5 per cent breaking through its key support zone between Rs 800 and Rs 810 last week. The stock has resumed its short-term downtrend that has been in place from its January peak of Rs 954. But it is hovering above a significant support level at Rs 760 from which it has rebounded in the past. The stock is hovering at a crucial trend deciding level and therefore short-term traders should tread with caution in the ensuing week. A strong decline below Rs 760 will pull the stock down to Rs 740. Important supports below this are at Rs 710 and Rs 690.

Short-term downtrend will be in place as long as the stock trades below Rs 880. A positive weekly close above Rs 880 is required to alter the downtrend and take the stock higher to Rs 900-920 levels. Important resistances to note are at Rs 800, Rs 840 and Rs 860.

State Bank of India (Rs 2,072.7)

The stock was volatile and closed marginally lower in the week ago. Since peaking out this January, it has been on a short-term downtrend. The stock is hovering well below its 50- and 200-day moving averages. We restate that the stock is trading at key medium-term trend deciding area and testing key support at Rs 2,075. Only a decisive decline below this level will mar the stock’s medium-term uptrend and pull it down to Rs 2,000 and then to Rs 1,900 in the medium-term. Traders should initiate fresh short positions only if the stock declines strongly below Rs 2,075 with same stop-loss.

On the other hand, significant resistance for the stock is in the band between Rs 2,200 and Rs 2,230, and the next at Rs 2,273. An emphatic up move beyond Rs 2,350 is needed to reverse the stock’s short-term downtrend and take it higher to Rs 2,450.

Infosys (Rs 2,889.9)

After testing key support at Rs 2,850, the stock advanced one per cent last week. Short-term perspective traders should tread with caution as long as the stock trades above Rs 2,850 levels. A fall below this level can pull the stock down to Rs 2,800 or lower. Key resistances for the week ahead are positioned at Rs 2,950 and Rs 3,000.

Medium-term trend has been up for the stock from its December 2012 low at Rs 2,250 levels. Investors can prolong their long holdings with stop-loss at Rs 2,500. The stock has important long-term resistance at Rs 3,000. Only a strong breakthrough of this resistance will accelerate the stock to Rs 3,100 or to Rs 3,200 in the medium-term. Key supports are pegged at Rs 2,800 and Rs 2,750.

Tata Steel (Rs 312.3)

The stock fell in line with our expectations and tested its long-term support at Rs 300. It declined 3 per cent for the week. Medium and short-term trends for the stock still remain down. Traders with a short-term horizon should tread with caution as long as the stock’s long-term support holds. Strong decline below Rs 300 will pave the way for a decline to Rs 270 in the medium-term.

The stock is trading well below its 50 and 200-day moving averages. Only a strong move above Rs 390 will alter the stock’s medium-term downtrend and take it higher to Rs 420. Key resistance for the week ahead are positioned at Rs 335, Rs 350 and Rs 365.

Published on March 30, 2013
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