Technical Analysis

Pivotals - Reliance Industries (Rs 773.1)

Yoganand D. | Updated on November 24, 2012 Published on November 24, 2012

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RIL was volatile and closed almost flat last week, forming a spinning top candlestick pattern implying indecisiveness in the weekly chart.

The stock is hovering just above its support band between Rs 750 and Rs 760 and testing its 200-day moving average. Short-term trend has remained down for the stock since its September 2012 peak of Rs 881.

Traders with a short-term perspective should tread with caution in the ensuing week. A decisive fall below Rs 750 will mitigate the stock’s medium-term uptrend and strengthen the bearish momentum. In that scenario, it can decline to Rs 725, Rs 710 and Rs 700 in the medium-term.

A near-term rally will encounter resistances at Rs 800 and then at Rs 815.

The stock needs to strongly move above Rs 830 to alter its short-term downtrend and push it higher to Rs 848 and Rs 881 in the same time frame.

Infosys (Rs 2,376)

The stock had advanced by Rs 34 in the previous week but is facing key resistance at its upper boundary of the sideways consolidation band between Rs 2,280 and Rs 2,400. Subsequent resistance is positioned at Rs 2,450 levels.

Although the stock’s daily indicators are displaying signs of upward reversal, the stock has to strongly move above Rs 2,450 to indicate that is short-term trend is turning positive. In that case the stock can rally to Rs 2,524 and Rs 2,649 in the medium-term.

Failure to rally above Rs 2,400 will jail the stock between Rs 2,280 and Rs 2,400 for some more time. An emphatic decline below the stock’s lower boundary at Rs 2,280 will drag it down to Rs 2,189, Rs 2,101 and Rs 2,030.

State Bank of India (Rs 2,089.7)

Short-term trend has been down for the stock from its October peak of Rs 2,363. As long as the stock trades below Rs 2,230, this downtrend stays in place.

Traders with a short-term perspective can consider holding their short positions with stop-loss at Rs 2,140 levels. The stock is currently testing its 200-day moving average. A weak start in the upcoming week will drag the stock lower to Rs 2,026 and Rs 2,000.

Next key supports below Rs 2,000 are at Rs 1,940 and Rs 1,900. Resistances are positioned at Rs 2,230, Rs 2,290 and Rs 2,360. A strong close above Rs 2,290 is required to alter the stock’s downtrend and push it to Rs 2,360 in the medium-term.

Tata Steel (Rs 364.3)

Last week, the stock fell 1.5 per cent in line with our expectation. The stock is trading well below its 50- and 200-day moving averages. Since its October 2012 peak of Rs 426, the stock has been on a short-term downtrend.

The stock’s daily indicators are hovering in the bearish zone and its weekly indicators have entered this zone from the neutral region indicating bearish momentum.

Traders with a short-term perspective can consider prolonging their short positions while maintaining stop-loss at Rs 375. Targets are Rs 354 and Rs 347.

Key medium-term support below Rs 347 is at Rs 335. Only a strong up move beyond Rs 400 will alter the stock’s short-term downtrend. Key resistances are positioned at Rs 390, Rs 400 and Rs 420 levels.

Published on November 24, 2012

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