Technical Analysis

Pivotals - Reliance Industries (Rs 723)

Yoganand D. | Updated on December 17, 2011 Published on December 17, 2011




The stock breached its key support level at Rs 750 on last Monday and moved sideways before finishing the week with a 4 per cent loss. The short-term trend is down for the stock. It reached our first target of Rs 730 and is about to reach the next target of Rs 700. Traders can hold their short positions with stop-loss at Rs 750. The weekly relative strength index has entered the bearish zone reinforcing the downward momentum. On the other hand, a strong move above Rs 750 will lead to a corrective rally to Rs 770 or to Rs 789 levels. Subsequent key resistance is at Rs 810.

Medium-term trend continues to be down for the stock. An emphatic breach of Rs 700 will pull the stock down to Rs 670 and Rs 650 in the months ahead.

Infosys (Rs 2,717.2)

Infosys prolonged its volatile movement testing the key resistance level at Rs 2,700 in the previous week and ended Rs 11 higher. Its 200-day moving average around Rs 2,765 is also providing resistance for the stock. Strong move above this average will provide the stock with an impetus to move higher. Traders can initiate long position once the stock moves above Rs 2,765 emphatically. We reiterate the targets of Rs 2,850 and Rs 2,900. But failure to move above and strong decline below the immediate support of Rs 2,600 will pull the stock down downwards to Rs 2,500 and then to Rs 2,450.

The medium-term trend remains down for the stock, as long as it trades below Rs 3,000. An emphatic jump above Rs 3,000 can accelerate the stock northwards to Rs 3,250 and to Rs 3,500 in the impending months. Medium-term significant support for the stock is at Rs 2,380.

State Bank of India (Rs 1,680.4)

SBI fell almost 5 per cent last Monday spoiling the stock's short-term positive bias. It continued to decline and completed the week by tumbling almost 10 per cent with extraordinary weekly volumes. The stock is hovering just above its immediate support of Rs 1,629.

Short-term traders should tread with caution in the stock as long as it hovers above Rs 1,629. A fall below this support will reinforce the medium-term downtrend and drag the stock down to Rs 1,510 in the medium-term. However to reverse the short-term downtrend, the stock needs to move above Rs 1,830 levels. Next resistances are pegged at Rs 1,888, Rs 1,936 and Rs 2,025.

Tata Steel (Rs 364.9)

In the previous week, Tata Steel plunged 8.5 per cent conclusively breaking through its key support band between Rs 390 and Rs 400.

The stock reached our initial target of Rs 374 and is heading towards the next medium-term target level of Rs 350. Next medium-term support is at Rs 330. Both short and medium-term trends are down for the stock. Inability to move above Rs 380 will be cue for initiating short positions while maintaining stop-loss at the same level.

Strong up move above Rs 420 is required to reverse the short-term downtrend and lift the stock higher to Rs 450 and to Rs 463 levels. Immediate resistances are at Rs 380 and Rs 400.

Published on December 17, 2011
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