Technical Analysis

Pivotals: Reliance Industries (Rs 849.9)

Yoganand D. | Updated on September 22, 2012 Published on September 22, 2012




Last week, RIL vacillated between an intra-week high and low of Rs 881 and Rs 828 respectively and ended marginally higher. This volatility has formed a spinning top candlestick pattern in the weekly charts signalling indecisiveness.

Short-term traders should tread with extreme caution in the upcoming week as the stock can prolong its volatile movements.

However, traders with a high risk profile can consider holding their long positions with stop-loss at Rs 832. It can rally to Rs 865 and to Rs 881 in the near-term.

Strong decline below Rs 832 will pull the stock down to Rs 800 and to Rs 780 in the same timeframe. Subsequent supports are at Rs 760 and Rs 742.

The stock has been on a medium-term uptrend from its May 2012 trough at Rs 671. A decisive jump above Rs 865 will take the stock upwards to Rs 900 in the medium-term.

Infosys (Rs 2,594.6)

Infosys too was choppy and fell 1.5 per cent in the past week. In the week ahead, the stock can consolidate sideways in the range between Rs 2,500 and Rs 2,650. Only a clear breakthrough from either side will determine the stock’s short-term trend. Traders can initiate fresh long positions if the stock moves above Rs 2,650 with tight stop-loss. In that scenario, the stock can rally to Rs 2,700 and then to Rs 2,750. Next important resistance is in the band between Rs 2,800 and Rs 2,820.

Conversely, a decline below its immediate support at Rs 2,500 will pull the stock down to Rs 2,440. Subsequent key support is at Rs 2,375. A conclusive decline below Rs 2,375 will mitigate the stock present up trend and pull it lower to Rs 2,270.

State Bank of India (Rs 2,212.6)

The stock zoomed 12 per cent in the previous week, triggered by the RBI’s CRR cut. The stock’s rally has breached key resistances.

However, the stock is currently testing a significant medium-term resistance band between Rs 2,200 and Rs 2,250.

Only a strong breakthrough of this resistance band will take the stock higher to Rs 2,350 or Rs 2,450 in the medium-term.

Traders with a short-term perspective can consider holding their long positions as long as the stock trades above Rs 2,140 with same stop-loss.

A decisive breakthrough of the abovementioned resistance band will take the stock higher to Rs 2,300 and to Rs 2,350.

But a fall below Rs 2,140 can drag the stock down to Rs 2,060 and to Rs 2,000. Strong decline below Rs 2,000 levels will mar the stock’s ongoing uptrend and pull it down to Rs 1,900.

Tata Steel (Rs 409)

The stock moved sideways with positive bias in the previous week. Short-term trend is up for the stock. Traders can prolong their long holdings while maintaining stop-loss at Rs 390. The target is the key resistance band between Rs 425 and Rs 430. An emphatic jump above Rs 430 will pave the way for a medium-term rally to Rs 450. Investors with a medium-term perspective can also accumulate the stock with deep stop-loss at Rs 380.

A fall below Rs 390 will pull the stock down to Rs 380 in the near-term. Important supports below Rs 380 are positioned at Rs 370 and Rs 358.

Published on September 22, 2012
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