Technical Analysis

Reliance Industries (Rs 781.8)

Yoganand D. | Updated on April 20, 2013 Published on April 20, 2013





The stock was volatile. After testing the key resistance at Rs 800, it fell and ended marginally higher in the previous week. It is moving sideways at a key trend-deciding level and so short-term traders should continue to tread with caution in the upcoming week. A strong decline below Rs 760 will drag the stock to Rs 740 levels.

On the other hand, the stock has significant resistances at Rs 800 and at Rs 840. Short-term trend will remain down as long as the stock trades below Rs 880. A strong rally above Rs 880 will strengthen its bullish momentum and take the stock higher to Rs 900-920 levels.

State Bank of India (Rs 2,294)

SBI zoomed 10 per cent with good volume in the truncated previous week. In this rally, the stock has decisively breached its 50- and 200-day moving averages. With a strong rally, and backed by positive divergence, we believe the stock’s medium-term downtrend has ended and nascent uptrend is in the pipeline. The stock’s daily relative strength index is featuring in the bullish zone and weekly strength is moving higher in the neutral region.

Further, daily and weekly price rate of change indicators are hovering in the positive territory implying buying interest. Short-term traders can consider buying the stock with stop-loss at Rs 2,230 levels. Targets are Rs 2,350 and then Rs 2,400 in the short-term. Important supports for the week are pegged at Rs 2,180 and Rs 2,075. Resistances above Rs 2,400 are at Rs 2,450 and Rs 2,550.

Infosys (Rs 2,295.4)

Infosys was choppy and formed spinning top candlestick indicating indecision in the week chart. Both medium- and short-term trends are down for the stock. Nevertheless, the stock is still testing key support at Rs 2,300. Its daily indicators are featuring in the oversold territory. Therefore, we do not rule out a minor corrective up-move to Rs 2,350 or to Rs 2,400 in the week ahead. Traders with short-term perspective should tread with caution as the stock is moving sideways, testing the key support at Rs 2,300. A strong decline below this level will pull the stock down to Rs 2,250 and to Rs 2,200 in the near-term. Next important support is at Rs 2,100.

Significant resistances to watch out for if the stock rallies above Rs 2,400 are at Rs 2,450 and Rs 2,500.

Tata Steel (Rs 299.9)

Tata Steel is continuing to test its significant long-term support at Rs 300. Though the stock’s short-term trend is down, daily indicators are displaying positive divergence signalling that a potential trend reversal is on the cards. We also observe that there has been an increase in volumes in the past two weeks. The stock needs to rally above Rs 320 to alter its short-term downtrend. Strong rally above Rs 320 will take the stock higher to Rs 335 or to Rs 345 in the forthcoming weeks. Next important resistance is at Rs 365.

An emphatic rally beyond Rs 390 will alter the stock’s medium-term downtrend and take it northwards to Rs 420 levels.

Conversely, decisive decline below Rs 300 can pull the stock down to Rs 270 in the medium-term.

Published on April 20, 2013
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