Technical Analysis

Pivotals - Reliance Industries (Rs 815.1)

Yoganand D. | Updated on August 18, 2012 Published on August 18, 2012





The stock prolonged its bullish momentum and advanced 4 per cent with good volume last week. Short-term trend is up for the stock. It is hovering well above its 50 and 200-day moving averages. Traders with short-term perspective can consider holding their long positions with stop-loss at Rs 790. Targets are Rs 830 and Rs 850. On the other hand, slump below Rs 790 can pull the stock down to supports at Rs 770 or Rs 750.

Medium-term trend has been up for the stock from the May 2012 trough. Investors with medium-term horizon can prolong their long positions with stop-loss at Rs 742. A strong rally above Rs 850 will take the stock higher to Rs 873 and then to Rs 900 in the medium-term. Key medium-term support below Rs 742 is at Rs 700.

Infosys (Rs 2,351.4)

Last week, the stock climbed 1.7 per cent with good volumes. Near-term trend is up for the stock. The daily oscillators and indicators are on the brink of entering positive territory implying bullish momentum. Traders can continue holding their long positions with stop-loss at Rs 2,300. We retain our short-term targets of Rs 2,400 and Rs 2,444, ceiling of the gap formed in July. Important resistance above Rs 2,444 is in the range between Rs 2,500 and Rs 2,540.

The stock needs to surpass Rs 2,600 level to alter its medium-term downtrend and take it higher to Rs 2,750 in the forthcoming weeks. Significant supports for the stock are pegged at Rs 2,270, Rs 2,200, Rs 2,150 and Rs 2,100.

State Bank of India (Rs 1,896.3)

The stock was volatile and moved sideways in the previous week forming a doji candle in the weekly chart implying neutral stance. It is trading well below its 50 and 200-day moving averages. Short-term trend remains down as long as the stock trades below Rs 2,060 levels. Traders can hold short positions with stop-loss at Rs 1,940. Near-term target is Rs 1,800 . Area around Rs 1,800 is key support level and traders should tread with caution at that level. However, an up move beyond Rs 1,950 can lead to a corrective move up to Rs 2,000 or to Rs 2,060.

The stock has been on a medium-term downtrend from its February 2012 peak at Rs 2,474. Only a significant fall below Rs 1,800 will pave the way for a medium-term decline to Rs 1,715 and to Rs 1,600 in the medium-term.

Tata Steel (Rs 394.8)

The stock fell marginally by 1.4 per cent last week and is still trading within the sideways consolidation range between Rs 390 and Rs 416. The stock is trading well below its 50 and 200-day moving averages. It is currently testing lower boundary Rs 390, the key support level. A tumble below this level will strengthen medium-tem bearish momentum. In that scenario, the stock can decline to Rs 380 and then to Rs 365 in the ensuing weeks. Immediate key resistance is at Rs 416. This resistance needs to be emphatically breached to alter the short-term bearish view and take the stock higher to the resistance zone at Rs 425 and Rs 430.

The stock has to make a strong rally above Rs 440 to reverse its medium-term downtrend and pave the way for an up move to Rs 470.

Published on August 18, 2012
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