Technical Analysis

Reliance Industries (Rs 775.3)

Yoganand D. | Updated on April 13, 2013 Published on April 13, 2013





RIL prolonged its holding above its significant support levels of Rs 760 in the week ago. Moreover, it is hovering at a trend-deciding level and therefore short-term traders should tread with caution in the ensuing week also. We reaffirm our prior stance that only strong breach of Rs 760 will pull the stock down to Rs 740 levels. In that case, traders can consider selling the stock with stop-loss at Rs 760.

Key supports below Rs 740 are placed at Rs 710 and Rs 690. Short-term trend will continue to be down as long as the stock trades below Rs 880. A decisive up-move beyond this level will reverse the stock’s downtrend and take it higher to Rs 900-920 levels. Significant resistances to watch for ahead are at Rs 800, Rs 840 and Rs 860.

State Bank of India (Rs 2,082)

Last week, the stock was volatile and closed on a marginally positive note. Its medium-term downtrend has been in place that started from this January peak of Rs 2,550. The stock is hovering well below both the 50 and 200-day moving averages. However, the stock is reversing higher from the key trend zone between Rs 2,025 and Rs 2,075, triggered by positive divergence in the daily moving average convergence divergence indicator. But it is premature to jump to the conclusion that medium-term trend has come to a halt. The stock needs to rally above the Rs 2,200 and Rs 2,230 resistance band in the near term. Short-term traders should tread with caution in the upcoming week as long as this resistance holds. Strong rally above the aforesaid band will take the stock higher to Rs 2,273 and to Rs 2,350.

Conversely, tumble below Rs 2,025 will pave the way for a decline to Rs 1,950 and then to Rs 1,900 in the medium-term.

Infosys (Rs 2,295.4)

Following the March 2013 quarter results, the stock nose-dived 21 per cent with a downward gap accompanied by extraordinary volume on Friday. For the week, the stock has tumbled 19.8 per cent. The stock has emphatically broken through key supports and 200-day moving averages. Medium as well as short-term trends are down for the stock. Investors with medium-term perspective can consider exiting the stock on a rally.

The stock is currently testing key support at Rs 2,300 and daily indicators are hovering in the oversold levels. Hence, we do not rule out a minor corrective rally to Rs 2,350 or Rs 2,400 in the ensuing week. Short-term traders can desist from trading in the stock for the week ahead. Key supports are at Rs 2,250, Rs 2,200 and Rs 2,150. Resistances above Rs 2,400 are at Rs 2,450 and Rs 2,500.

Tata Steel (Rs 299.3)

The stock is testing significant long-term support at Rs 300. It is trading well below its 50 and 200-day moving averages. We notice that there is an increase in daily volume in the past four trading sessions. Short-term traders should continue to tread with caution as long as the stock’s long-term support holds. We reiterate that only a conclusive decline below Rs 300 will drag the stock down to Rs 270 in the medium-term. Important resistances to watch are pegged at Rs 335, Rs 350 and Rs 365 levels.

On the upside, the stock needs to decisively rally above Rs 390 to alter its medium-term downtrend and push it northwards to Rs 420.

Published on April 13, 2013
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