Technical Analysis

Pivotals - Reliance Industries (Rs 782.1)

Yoganand D. | Updated on August 25, 2012 Published on August 25, 2012




RIL moved contrary to our expectations and fell Rs 33 or 4 per cent last week. Though the stock is still trading well above its 50 and 200-day moving averages, its short-term uptrend is losing bullish momentum. Traders with short-term perspective should tread with caution in the ensuing week.

The stock can decline further to the next supports at Rs 770 and Rs 750 in the near-term.

However, the medium-term trend has been up for the stock from its 52-week low at Rs 671 registered in early May this year. Investors with medium-term horizon holding the stock can continue to do so as long as it trades above Rs 742, with stop-loss at same level.

An upward reversal from the aforementioned supports will take the stock higher to Rs 800, Rs 815 and then to Rs 830.

Infosys (Rs 2,445.3)

The stock continued its uptrend by gaining 4 per cent during the previous week. This rally was as we had anticipated, and achieved our upper target of Rs 2,444 mentioned last week. Short-term trend has been up for the stock since the Rs 2,101 low last month.

Traders can consider holding their long positions with stop-loss at Rs 2,400.

The stock can move higher to Rs 2,500 and Rs 2,540, which is a key resistance band. Subsequent resistance is at Rs 2,600; the stock needs to decisively surpass this level to reverse its medium-term downtrend.

On the other hand, tumble below Rs 2,350 will pull the stock down to Rs 2,270 and Rs 2,200 in the short-term. Important supports below Rs 2,200 are at Rs 2,150 and Rs 2,100.

State Bank of India (Rs 1,894.8)

Last week too the stock was volatile and moved sideways in a narrow range. The stock is hovering well below both 50 and 200-day moving averages. As long as the stock trades below Rs 2,060, its short-term trend stays down with negative bias. Traders can hold short positions with stop-loss at Rs 1,940. Near-term target is Rs 1,800.

Traders should be alert around the stock’s immediate support positioned at Rs 1,800. A rally above Rs 1,950 can lift the stock higher in a corrective move to Rs 2,000 or to Rs 2,060.

Medium-term trend has been down for SBI since its February 2012 peak at Rs 2,474. Strong slump below Rs 1,800 will pave the way for a medium-term decline to Rs 1,715 and to Rs 1,600.

Tata Steel (Rs 387.7)

Tata Steel slipped marginally by 1.8 per cent and is testing the lower boundary of the sideways consolidation range between Rs 390 and Rs 416.

A decisive fall in the starting of next week will reinforce bearish momentum and drag the stock down to Rs 380 and then to Rs 365.

In that case, traders can initiate fresh short positions with stop-loss at Rs 392 levels.

Key resistances for the week ahead are at Rs 406 and Rs 416. The stock has to surpass the second resistance to alter the short-term bearish trend. Next resistance is in the zone between Rs 425 and Rs 430.

Published on August 25, 2012
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