Technical Analysis

Pivotals - Reliance Industries (Rs 720.4)

Yoganand D. | Updated on July 28, 2012 Published on July 28, 2012



RIL prolonged its sideways movement in the band between Rs 700 and Rs 742 in the previous week. Short-term traders should tread with caution as long as the stock trades in this band.

A decisive jump above Rs 742 will lift the stock higher to Rs 765 and to Rs 780 in the approaching weeks. Subsequent medium-term resistances are positioned at Rs 792 and Rs 830.

But a decline below Rs 700 will reinforce bearish momentum and pull the stock down to Rs 670 and to Rs 650 in the same time-frame.

Infosys (Rs 2,148.8)

The stock declined in the previous week in line with our view. It marked its 52-week low at Rs 2,101, just above our initial price target of Rs 2,090. For the week, the stock slipped 3 per cent.

Though the stock has breached its key support at Rs 2,200 and is trading below it, its daily indicators are showing some positive signals. Avoid trading in the stock as long as it trades in range between Rs 2,100 and Rs 2,250. A strong jump above Rs 2,250 will take the stock higher to Rs 2,300 and then to Rs 2,400. Next important resistance is in the band between Rs 2,500 and Rs 2,540.

Medium-term trend continues to be down for the stock. A strong decline below Rs 2,100 can pull the stock down to Rs 2,000. Only a jump above Rs 2,600 will alter this downtrend.

State Bank of India (Rs 1,941.2)

SBI tumbled 9 per cent with good volumes last week, breaking through key support and the 200-day moving average. This decline was in line with our expectations. Short-term trend is down for the stock. As long as the stock trades below Rs 2,100, short-term downtrend remains in place. Traders with short-term perspective can consider holding their short positions with stop-loss at Rs 2,010. The stock can continue its downtrend and reach Rs 1,900 and then Rs 1,800 in the forthcoming weeks.

Nevertheless, an emphatic rally above Rs 2,100 will reverse the downtrend and push the stock higher to Rs 2,170 and then to Rs 2,230. Key medium-term resistances above Rs 2,230 are at Rs 2,326 and Rs 2,494.

Tata Steel (Rs 399.3)

Tata Steel jumped 4 per cent accompanied by above average volumes on Friday, trimming its weekly loss to 4 per cent. Near-term stance is cautious for the stock. A strong breakthrough of Rs 408 is needed for initiating fresh long positions with same stop-loss. In that scenario, the stock can rally to Rs 416 and then to Rs 425-430 range in the ensuing weeks. A failure to rally above Rs 416 will confine the stock to hovering between Rs 390 and Rs 416.

Medium-term trend is down from the stock. A strong rally above Rs 440 is required to alter this downtrend and take the stock higher to Rs 470 in the months ahead.

Published on July 28, 2012
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