Technical Analysis

Tata Steel (₹448.2)

Yoganand D | Updated on November 22, 2014 Published on October 12, 2014






SBI (₹2,451.3)

Amidst volatility, the SBI stock advanced 1 per cent after testing its key support at ₹2,350 levels last week. However, the stock continues to be in a sideways consolidation phase in the band between ₹2,350 and ₹2,600. Significant immediate resistance is pegged at ₹2,500. The indicators in the daily chart are trending down, implying weakness. An emphatic decline below ₹2,350 can strengthen the bearish momentum and drag the stock down to ₹2,250 and then to ₹2,100 in the medium term. Traders with a short-term horizon should tread with caution as long as the stock trades within this sideways band and consider initiating fresh short position only on a decisive fall. But, a strong rally above the key resistance level of ₹2,600 can take the stock higher to ₹2,750 and then to ₹2,850 in the medium term.

ITC (₹353.1)

The stock of ITC plunged 3.3 per cent, accompanied by good volumes, breaching a key support around ₹360 on Friday. With this fall, the stock has also breached its 21- and 50-day moving averages. The short-term trend has turned bearish. The indicators in the daily and weekly chart are trending lower, signalling a downtrend. Investors with short- as well as medium-term perspective should take profits off the table and remain on the sidelines for now. An emphatic breakthrough of the immediate support at ₹350 can pull the stock down to ₹344 and ₹340 in the ensuing weeks. This will mar the stock’s medium-term uptrend. The next key support is at ₹330. Any corrective rally in the stock will encounter resistance at ₹360 and then at ₹365. Subsequent resistances are at ₹370 and ₹380.

Infosys (₹3,888.9)

The Infosys stock was extremely volatile. It declined 6.4 per cent to an intra-week low of ₹3,600 and then recovered sharply on the back of strong September quarter results. It has breached the medium-term resistance between ₹3,800 and ₹3,850. With this, we reiterate our prior view that investors with a short- and medium-term view can buy the stock with stop-loss at ₹3,750 and ₹3,600, respectively. Targets are ₹3,900 and ₹4,000 levels. Since its May low of ₹2,894, the stock has been on a medium-term uptrend. The short-term trend is also up. The volumes too have increased over the past four trading sessions. The stock is trading well above its 21- and 50-day moving averages. Key supports are at ₹3,750 and ₹3,600 levels. Subsequent support levels are at ₹3,550 and ₹3,450.

RIL (₹960.3)

Though the stock of RIL surged 3.6 per cent with good volumes last week, it is testing a key resistance in the band between ₹960 and ₹970. Short-term traders should tread with caution until this resistance is breached. An emphatic breakout will reinforce bullish momentum and also buying opportunity with a stop-loss at ₹960. In such a scenario, the stock can trend higher to ₹980 or to ₹1,000 in the coming weeks. However, this will only be a corrective rally. A decisive breakthrough of the stock’s next key resistance at ₹1,040 is required to alter its downtrend and take it higher to ₹1,070 or ₹1,100 in the medium term. Inability to breach the resistance level can pull it down to ₹930 or ₹920. A tumble below the significant support at ₹900 can drag the stock down to ₹870 and ₹850 in the medium term.

Tata Steel (₹448.2)

Tata Steel ended flat for the week, after a choppy trade. The key support and 200-day moving average around ₹450 provided base for the stock. The short-term trend has been down for Tata Steel since encountering resistance at ₹570 in late July. Further, the stock is hovering well below its 21-day and 50-day moving averages. The indicators in the daily chart continue to feature in the bearish zone, backing the downtrend. A decisive breakthrough of the current support level will strengthen the downtrend. Traders can initiate fresh short positions in such a scenario, with a stop-loss at ₹470. Targets are ₹426, ₹410 and ₹400. Investors with a medium-term horizon can remain on the sidelines. Resistances are placed at ₹467, ₹480, ₹500 and ₹510 levels.

Published on October 12, 2014

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