Technical Analysis

Pivotals: Reliance Industries (Rs 853.4)

Yoganand D. | Updated on October 05, 2013 Published on October 05, 2013





After an initial decline, the stock bounded up during the latter part of the week to end 1.6 per cent higher. This rally has hit the stop-loss mentioned last week. For the past one month, the stock has been on a broad sideways movement in the band between Rs 820 and Rs 900. Short-term traders should tread with caution or desist from trading in the ensuing week. Within the sideways range, the stock is now testing resistance at Rs 860. A strong breach of this resistance can take the stock higher to the upper boundary of its sideways movement at Rs 890-900.

Only a decisive breakthrough of this upper boundary will reinforce the bullish momentum and take the stock northwards to Rs 920. On the other hand, a fall below Rs 820 will pull the stock down to Rs 790 or Rs 770 in the coming weeks. The medium-term picture remains the same - sideways consolidation phase in a broad range between Rs 770 and Rs 920.

State Bank of India (Rs 1,652.4)

The stock’s important support at Rs 1,600 provided a cushion in the week ago and the stock closed marginally higher. However, the near-term outlook for the stock is negatively biased. Traders with a short-term perspective should initiate fresh short positions with a stiff stop-loss only if it declines below Rs 1,600. The downside target is its next support in the band between Rs 1,500 and Rs 1,510. The important support below this band is positioned at Rs 1,400.

Resistances for the week are at Rs 1,725 and Rs 1,800 levels. To alter the short-term outlook, the stock needs to decisively move above Rs 1,800. Subsequent key resistances are pegged at Rs 1,900 and Rs 2,000. The stock has been in a medium-term downtrend from its May 2013 peak of Rs 2,469. It has to conclusively rally above Rs 2,000 to revise its medium-term downtrend and move higher to Rs 2200.

I nfosys (Rs 3,015.4)

Infosys extended its narrow movement in its sideways phase in the band between Rs 2,950 and Rs 3,130. Its daily indicators are hovering in the neutral region. Traders with a short-term perspective should treat the stock with caution as long as it stays within the aforesaid range. A strong fall below Rs 2,950 will be the cue for initiating fresh short positions with the same as stop-loss. Downward targets will be Rs 2,900 and Rs 2,800.

Conversely, an emphatic upward breakthrough of Rs 3,130 will reinforce its bullish momentum and push the stock northwards to Rs 3,225 levels over the medium-term. As long as the stock trades above Rs 2,600 levels, its medium-term uptrend remains in place.

Tata Steel (Rs 288.4)

The stock was choppy last week and finished almost at the same levels. It is currently facing its key resistance at Rs 300. A strong rally above this level will cue for initiating a fresh long position with a stop-loss at Rs 300. Targets are Rs 315 and Rs 320. An important resistance beyond Rs 320 is at Rs 340.

But a decline below its significant short-term trend-deciding-level at Rs 260 will pave the way for a downfall to Rs 240 in the ensuing weeks. Key supports to watch in the upcoming week are placed at Rs 280 and Rs 270.

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Published on October 05, 2013
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