Technical Analysis

Pivotals - Reliance Industries (Rs 795.40)

Yoganand D. | Updated on September 08, 2012 Published on September 08, 2012





Reliance Industries gained 3 per cent this week, forming a bullish engulfing candlestick pattern in the weekly chart. Traders with short-term perspective can prolong holding their long positions with stop-loss at Rs 785. In the short term, the stock can continue its upward momentum and reach our price target of Rs 815 and then to Rs 830 in the ensuing weeks. Short-term supports are pegged at Rs 764 and Rs 750 levels.

The stock has been on a medium-term uptrend from its May trough at Rs 671. Investors with a medium-term perspective can continue their long holdings as long as the stock trades above Rs 742. Only a decline below Rs 742 will negate the medium-term uptrend and pull the stock down to Rs 710.

Infosys (Rs 2,495.90)

The initially stock declined to an intra-week low of Rs 2,310 and rebounded sharply. The stock has surged 5 per cent last week. This up move was in line with our prior expectation. Now, traders can consider holding their long positions while maintaining stop-loss at Rs 2,450. Targets for the stock are Rs 2,540 and a strong rally above Rs 2,540 will lift the stock higher to Rs 2,600 in the short term.

Further, an emphatic up move above Rs 2,600 will alter the stock’s medium-term downtrend and take it higher to Rs 2,700 in the medium term. On the other hand, a plunge below Rs 2,300 will drag down the stock to Rs 2,270 and Rs 2,200 in same time frame. Key short-term supports for the stock are at Rs 2,400 and Rs 2,338.

State Bank of India (Rs 1,895.40)

Last week, the stock was volatile and gained 2.7 per cent. However, its near-term stance is one of caution and short-term traders should watch out in the forthcoming week. The stock is currently facing key resistance at Rs 1,950. Strong move above this level can push the stock higher to Rs 2,000 and then to Rs 2,060. However, the stock needs to conclusively move beyond Rs 2,100 to modify its short-term downtrend and take it higher to Rs 2,200 levels.

Failure to rally above Rs 1,950 or Rs 2,000 will confine the stock to moving sideways in the broad trading range between Rs 1,800 and Rs 2,000 in the short term. Significant supports below Rs 1,800 are at Rs 1,715 and then to Rs 1,600.

Tata Steel (Rs 362.50)

Following an initial decline, the stock found support at around Rs 350 and rebounded sharply on Friday. This up move was triggered by positive divergence in daily relative strength index. The stock has advanced by 3 per cent accompanied by good weekly volume. However, short-term trend is still down for the stock.

Only a strong rally above the key resistance band between Rs 385 and Rs 395 will be the cue for initiating fresh long positions and in that scenario the stock can rally to Rs 415 and then to the next resistance between Rs 425 and Rs 430 in the coming weeks. Short-term supports for the stock are at Rs 361 and Rs 347.

Published on September 08, 2012
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