Technical Analysis


Yoganand D. | Updated on January 30, 2011





Reliance Industries (Rs 914.5)

RIL tumbled 7 per cent with strong volumes last week. It is currently testing the lower boundary of its medium-term range. The weekly indicators have entered into the negative territory. Conclusive decline below Rs 900 will pull the stock down to Rs 858 or Rs 832 over the ensuing weeks. Target below Rs 832 is Rs 760.

Short-term trend is down since January 5 high of Rs 1,090. The stock has plunged 13.6 per cent this month. As the stock has fallen sharply and is testing key support and there is an increase in daily volumes, a minor corrective rally is possible in the days head to Rs 940 or Rs 960. Traders can initiate fresh shorts on failure to move above the first resistance.

State Bank of India (Rs 2,618.5)

Following an initial rally on Monday, SBI encountered resistance around Rs 2,700 and started to decline. However, the stock managed to end with 0.8 per cent gain for the week. Short-term trend is down for the stock. A strong move beyond Rs 2,750 can lift the stock higher to Rs 2,850. Failure to surge above Rs 2,750 can drag the stock down to Rs 2,550 and then to Rs 2,468 in the short-term. Desist trading in the stock as long as it trades below Rs 2,750 levels.

The stock continues to be in a medium-term downtrend from its November peak of Rs 3,515. Key medium-term resistance is at Rs 2,870. Strong fall below Rs 2,500 will pull the stock down to Rs 2,200 or even Rs 1,900 over the medium-tem.

Tata Steel (Rs 635.9)

In the midst of a volatile week, the stock managed to close in a positive note by gaining Rs 6. It has been on a short-term downtrend and this trend stays in place as long as the stock trades below Rs 665. Fresh short position can be initiated if the stock fails to surpass this level with stiff stop-loss at Rs 665. Downside targets for the stock are Rs 630 and Rs 612. Support below this level is at Rs 590. On the other hand, conclusive jump above Rs 665 will lift the stock higher to Rs 680 and then to Rs 700.

Medium-term trend remains up for the stock since June 2010 low and plunge below Rs 580 is needed to negate this trend.

Infosys Technologies (Rs 3,173.5)

The stock dived 2.3 per cent during the previous week and closed below its short-term support level of Rs 3,200. Traders can hold their short positions with stop-loss at Rs 3,200. Short-term targets for the stock are Rs 3,100 and Rs 3,065. Key resistance for the week are positioned at Rs 3,250 and Rs 3,350.

The stock has key medium-term support at Rs 3,150 and investors should desist from adding fresh positions on a close below this level. Next medium term target would be Rs 2,940.

Published on January 30, 2011

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