Technical Analysis

Pivotals: Reliance Industries (Rs 857.4)

Yoganand D. | Updated on October 06, 2012 Published on October 06, 2012





Reliance Industries advanced 2.5 per cent in the previous week. However, fresh long position is recommended only if the stock moves above Rs 860 strongly.

The upper targets for the stock are Rs 880 in the short-term and to Rs 900 in the medium-term.

Conversely, a significant drop below its immediate key support around Rs 830 will trigger fresh selling pressure for the stock. In that scenario, it can decline to Rs 810 and Rs 800 range. Subsequent supports are placed at Rs 780 and Rs 760 levels.

Infosys (Rs 2,527.9)

The stock was very volatile in the week ago and formed a spinning top candlestick pattern implying indecisiveness. But the stock is still moving sideways between Rs 2,500 and Rs 2,650. Only a strong breakthrough on either side will determine its short-term trend. Short-term traders can consider initiating fresh short position if the stock declines below Rs 2,500 with same stop-loss. Targets are Rs 2,440 and Rs 2,375. A slump below Rs 2,375 will negate its medium-term uptrend and drag it lower to Rs 2,270.

However, a conclusive up move beyond Rs 2,650 will take the stock to Rs 2,700 and then to Rs 2,750 in the short-term. Key medium-term resistance is pegged at Rs 2,800.

State Bank of India (Rs 2,339.3)

In the previous week, the stock gained 4.4 per cent in line with our expectations. Following a sharp rise in the stock price over the last four week, the stock’s daily indicators are featuring in the overbought levels implying near-term correction. Traders with short-term perspective can consider taking profits off the table at this juncture. The stock is testing key resistance at Rs 2,350 levels. Strong rally above this level, following the correction will take the stock higher to Rs 2,400 and Rs 2,460 in the forthcoming weeks.

But failure to rally above Rs 2,350 will pull the stock down to Rs 2,250 and Rs 2,200 levels. Next supports are positioned at Rs 2,140 and Rs 2,060 levels.

Tata Steel (Rs 410.3)

The stock has been moving sideways in a narrow range of Rs 395 and Rs 415 over the past three weeks and is currently testing important resistance around Rs 415. Traders can initiate fresh long position only if this resistance is taken off in the ensuing week. Targets are Rs 425 and Rs 430 levels. A decisive breakthrough of Rs 430 will take the stock higher to Rs 450 in the medium-term.

Nevertheless, decisive decline below Rs 390 will drag 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 October 06, 2012
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