Technical Analysis

Reliance Industries (Rs 810.8)

Yoganand D. | Updated on March 23, 2013 Published on March 23, 2013

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The stock declined in line with the broader market last week. It fell almost 4 per cent, continuing its short-term downtrend. However, the stock is testing its key support zone between Rs 800 and Rs 810. Its 200-day moving average is also poised in this zone. Short-term traders should tread with caution as long as the aforesaid support zone holds. Fresh short positions can be initiated only if the stock declines below Rs 800 with same level as stop-loss. In that scenario, the stock can decline to Rs 780 and to Rs 770 in the short-term. Significant resistances are at Rs 830, Rs 840 and then at Rs 860. Only a strong rally above Rs 880 will alter the stock’s downtrend and take it higher to Rs 900.

The stock has important long-term support in the band between Rs 740 and Rs 750. Investors with a medium-term perspective can consider accumulating the stock on declines with stop-loss at Rs 740.

State Bank of India (Rs 2,083.9)

SBI plunged 7.8 per cent resuming its short-term downtrend last week. It has been on a short-term downtrend from its January peak of Rs 2,550. The stock is trading well below its 50- and 200-day moving averages. Nevertheless, the stock is hovering at a key medium-term trend deciding area. An emphatic decline below Rs 2,075 will mitigate the stock's medium-term uptrend and drag it down to Rs 2,000 and then to Rs 1,900 in the medium-term.

The stock's daily indicators are featuring in the bearish zone and weekly indicators are on the brink of entering the bearish zone. Traders with a short-term perspective can initiate fresh short positions if the stock declines below Rs 2,075 with same stop-loss. Key immediate resistance is in the band between Rs 2,200 and Rs 2,230, and the next is at Rs 2,273 levels. The stock needs to rally beyond Rs 2,350 to alter its short-term downtrend.

Infosys (Rs 2,860.6)

The stock was choppy and fell only 0.8 per cent last week. It is currently testing key support at Rs 2,850. Only a decisive decline below this support will prompt selling pressure. In that case, traders can initiate short positions with stop-loss at Rs 2,850 levels and stock can decline to Rs 2,800 or to Rs 2,750 in the short-term. Significant resistances are positioned at Rs 2,950 and Rs 3,000.

The stock has been on a medium-term uptrend since taking support at around Rs 2,250 in December 2012. Investors with a medium-term perspective can prolong their holdings with stop-loss at Rs 2,500. Strong breakthrough of Rs 3,000 can push the stock higher to Rs 3,100 and to Rs 3,200 in the medium-term.

Tata Steel (Rs 322.1)

Tata Steel tumbled 9 per cent breaking through an important support at Rs 335 in the previous week. With this fall, the stock appears to have resumed its intermediate-term downtrend that has been in place from its January 2011 peak of Rs 713 levels. Medium- as well as short-term trends for the stock are down. There are no signs of trend reversal in the stock. Short-term traders can consider holding their short positions with stop-loss at Rs 333.

The stock is trading well below its 50- and 200-day moving averages. Both daily and weekly indicators are featuring in the bearish zone implying downward momentum. The stock can continue its downtrend and test its significant long-term support at Rs 300 in the weeks ahead. Next important long-term support is at around Rs 270. Key resistances for the ensuing week are at Rs 335, Rs 350 and Rs 365.

Published on March 23, 2013
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