Technical Analysis

Pivotals - Reliance Industries (Rs 760.8)

Yoganand D. | Updated on August 13, 2011 Published on August 13, 2011



In line with our expectations, RIL fell almost 4 per cent last week. It is now testing the support band between Rs 750-760. This band is likely to provide cushion for the stock in the near term. A reversal from here can take the stock higher to Rs 790 and then to Rs 800-810 range. That said short-term traders should tread with caution in the coming week. Next resistances are at Rs 830 and Rs 850.

A decisive dive below Rs 750 will reinforce the stock's medium-term downtrend that has been in place from its April peak of Rs 1,065. Supports in which case are present at Rs 722 initially and then 700.

State Bank of India (Rs 2,193.4)

The stock was volatile last week and finished 1.8 per cent lower. Formation of a spinning top candlestick pattern in the weekly chart signals indecisiveness. Its volatile movements can prolong in the week ahead. Traders therefore should tread doubly cautious in the stock. The stock is trading well below its 21- and 50-day moving averages and is currently testing its long-term support band between Rs 2,150 and Rs 2,200. Medium-term trend is down from its April peak of Rs 2,959 levels. Conclusive tumble below this support will pull the stock down to Rs 2,050 and then to Rs 2,000 in the medium term. In the short-term, if the key support holds the stock can vacillate between Rs 2,150 and Rs 2,350. Key resistances are at Rs 2,270 and Rs 2,350. Only a strong move above Rs 2,350 will push the stock higher to Rs 2,400 and then to Rs 2,500.

Tata Steel (Rs 476.3)

Strengthening the medium-term downtrend, Tata Steel plunged more than 10 per cent accompanied by good volumes last week. This decline was in line with our expectation and the stock achieved our medium-term price target of Rs 493, even as it slipped further to register a 52-week low at Rs 471 on Friday.

There is an increase in daily volumes over the past six trading sessions. The stock is trading below the lower boundary of the Bollinger Bands, signalling that it is oversold. Its daily relative strength index is featuring in the oversold area. Moreover, the stock is testing its immediate support at around Rs 470. A near-term corrective up move in the stock cannot be ruled out at current levels; it can rally to Rs 500 and then to Rs 520 in the days ahead. However, on the downside, a fall below Rs 470 will pull the stock down to Rs 450.

Infosys (Rs 2,374.4)

Infosys plunged 8 per cent with good weekly volumes last week. This decline has accelerated the stock's medium and intermediate-term downtrend. It is currently testing its key support at Rs 2,400. Reversal from this support can take the stock upwards to Rs 2,460 first and to Rs 2,530 levels. Failure to move above the first resistance level will confine the stock to a sideways move in the range between Rs 2,350-2,460.

Next key supports for the stock are at Rs 2,300 and Rs 2,200. Significant medium-term resistance are at Rs 2,600 and then at Rs 2,700 levels.

Published on August 13, 2011
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