Technical Analysis

Pivotals: Reliance Industries (Rs 863)

YOGANAND D. | Updated on October 12, 2013 Published on October 12, 2013

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The stock was volatile, hovering around its 200-day moving average and gained Rs 9.5 last week . It prolonged its sideways consolidation movement that has been in place for the past one month in the band between Rs 820 and Rs 900. Short-term traders should remain watchful in the week ahead, given that it is truncated. The stock is now testing a key resistance at Rs 860. An emphatic move above this hurdle will push the stock higher to Rs 890 and Rs 900 zone, which is the upper boundary of the sideways movement.

Further, breakthrough of Rs 900 will strengthen the stock’s bullish momentum and pave way for an up move to Rs 920 in the medium-term. But, a decline below Rs 820 can drag the stock lower to Rs 790 or Rs 770 levels in the medium-term. The stock continues to remain in a wide sideways consolidation band between Rs 770 and Rs 920 in the medium-term.

State Bank of India (Rs 1,651.6)

Last week, SBI was choppy and formed a spinning top candlestick pattern in the weekly chart implying indecisiveness. Therefore, traders with a short-term perspective should tread with caution in the coming week. The stock is just hovering above the key support at Rs 1,600. Strong decline below this level will be a cue for initiating a fresh short positions with a tight stop-loss. The stock can decline to its subsequent support in the band between Rs 1,500 and Rs 1,510. Next key support below this band is at Rs 1,400.

Significant resistances for the week ahead are at Rs 1,725 and Rs 1,800 levels. The stock needs to conclusively rally above Rs 1,800 levels to alter the bearish short-term outlook. Next important resistances are at Rs 1,900 and Rs 2,000 levels. From the May 2013 peak of Rs 2,469, the stock has been on a medium-term downtrend. A strong rally above Rs 2,000 is required to alter the medium-term downtrend and take it higher to Rs 2,200.

Infosys (Rs 3,273.9)

After its strong Q2 results announcement on Friday, the stock gained almost 5 per cent, breaking out of the sideways consolidation range between Rs 2,950 and Rs 3,130. During the week, the stock surged 8.6 per cent with extraordinary volumes, reinforcing the medium-term uptrend. The short-term trend has also turned bullish. Important resistances ahead are at Rs 3,360 and Rs 3,400. The key supports are pegged at Rs 3,130 and then at Rs 3,000.

Medium-term trend has been up since the May 2013 low at Rs 2,190 levels. Investors with a medium-term perspective can continue with their long holdings with a stop-loss at Rs 2,700 levels. An important medium-term resistance is at Rs 3,500 levels.

Tata Steel (Rs 307.7)

Tata Steel jumped 6.7 per cent in the week ago, decisively breaching the key resistance at Rs 300. The short-term trend has turned positive. The stock can now trend upwards to Rs 315 and then to Rs 320 in the approaching trading sessions. Short-term perspective traders can initiate fresh long position with a stop-loss at Rs 300. Next important resistance after Rs 320 is pegged at Rs 340. The daily indicators are hovering in the positive territory.

The medium-term trend has been up for the stock from its August 2013 low of Rs 195. As long as the stock trades above Rs 250, this uptrend remains in place. The key supports to watch are at Rs 288 and Rs 270 levels.

Published on October 12, 2013
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