Technical Analysis

Pivotals: Reliance Industries (Rs 793.9)

LOKESHWARRI S.K. | Updated on December 01, 2012 Published on December 01, 2012





Reliance went on to reverse from the intra-week low of Rs 771 to form a morning star pattern in the weekly candlestick chart. That this reversal happened from the long-term 200 day moving average is also positive for the stock. But the stock is halting just below the short-term resistance at Rs 806. Fresh long positions are advised only on a firm move beyond this level early next week. Inability to do so will drag the stock lower to Rs 790 or Rs 780.

But move above Rs 806 can result in the stock moving higher to Rs 821 or Rs 835 in the coming weeks.

The medium-term trend in the stock turned positive since the trough at Rs 673 formed in May. This view will reverse only on a close below Rs 750. If the stock manages to hold above this level, move to Rs 870 or Rs 935 is possible again in the months ahead.

State Bank of India (Rs 2,170)

SBI too staged a good reversal last week, going on to close Rs 80 higher. The stock has key short-term support at Rs 2,030. Close below this level is required to reverse the uptrend that is in place since August. As long as the stock trades above this level, possibility of move higher to Rs 2,388 or Rs 2,591 remains open.

For the short-term the stock will face resistance at Rs 2,171, Rs 2,208 and Rs 2,240. The stock will get support for the week at Rs 2,100 and Rs 2,044.

Despite the stock moving in a wide range between Rs 1,800 and Rs 2,500, the medium-term outlook for SBI is positive. The stock will have to breach its December 2011 low of Rs 1,576 to negate this view.

Infosys (Rs 2,436.6)

Infosys too recorded a sharp break-out last week to close Rs 60 higher. This move has, however, taken the stock close to its 200-day moving average at Rs 2,492. There is the next hurdle just above at Rs 2,512. Short-term traders can book some profits if the stock is unable to move above this level. Next short-term target on move above Rs 2,512 is Rs 2,650.

Short-term supports for the stock are at Rs 2,400 and Rs 2,356.

Infosys is reversing from critical long-term support zone between Rs 2,000 and Rs 2,200. If the stock manages to hold above Rs 2,300 in the coming weeks, it will signal the formation of a significant trough at Rs 2,101 in July.

Tata Steel (Rs 385.4)

The medium-term view on Tata Steel is rather weak since it is forming consecutively lower peaks since this February. The stock has moved close to its key medium term support zone between Rs 340 and Rs 360. Investors with a greater penchant for risk can accumulate the stock in this zone with stop at Rs 330.

The stock will face short-term resistance at Rs 400 and Rs 426 in the days ahead. Supports will be available at Rs 359 and Rs 347.

Published on December 01, 2012

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