Technical Analysis

Pivotals: Reliance Ind, State Bank of India, Infosys, Tata Steel

YOGANAND D. | Updated on October 19, 2013 Published on October 19, 2013





Reliance Industries (Rs 905.3)

RIL almost surged 5 per cent in the previous week and has moved out of its sideways consolidation movement by surpassing Rs 900, a key barrier. The short-term trend has now turned into an uptrend. The stock is trading well above its 50- and 200-day moving averages. Moreover, there has been an increase in daily volumes in the past three sessions backing the bullish momentum. Traders can buy the stock with a stop-loss at Rs 890. Targets are Rs 920 and Rs 936.

The medium-term trend continues to be sideways consolidation in the broadband between Rs 770 and Rs 920. Investors can consider holding their long positions with stop-loss at Rs 820. Strong rally above Rs 936 will push the stock higher to Rs 955 in the medium-term. The important supports to watch for in the week ahead are at Rs 880 and Rs 860. Next supports are at Rs 840 and Rs 820.

State Bank of India (Rs 1,664.8)

Volatility continued in the stock last week also. It formed another spinning top candlestick pattern in the weekly chart implying indecisiveness. Hence, traders with a short-term perspective should remain cautiousin the ensuing week. A decisive downward break of the stock’s important support at Rs 1,600 will trigger selling pressure on the stock. In that scenario, the stock can decline to the next support in the zone of Rs 1,500 and Rs 1,510. Support below this band is pegged at Rs 1,400.

On the other hand, the stock will face significant resistances at Rs 1,725 and Rs 1,800 levels. It needs to decisively breakthrough the resistance at Rs 1,800 to revise the short-term downtrend. Subsequent resistances at Rs 1,900 and Rs 2,000 will then come into play. However, to alter the stock’s medium-term downtrend, it has to emphatically rally above Rs 2,000. Key medium-term resistance is at Rs 2,200.

Infosys (Rs 3,316.1)

Amidst choppiness, Infosys managed to advance 1.3 per cent in the previous week. The short and medium-term trends are up for the stock. Key resistances are pegged at Rs 3,360 and Rs 3,400. Likewise, important supports are placed at Rs 3,200, Rs 3,130 and Rs 3,000. Failure to surpass Rs 3,360 will confine the stock to moving sideways in the range between Rs 3,200 and Rs 3,360 in the short-term.

Since its May 2013 low of Rs 2,190, the stock has been on a medium-term uptrend. Investors can prolong their long positions with stop-loss at Rs 2,700. The stock has the potential to trend to Rs 3,500 level in the medium-term.

Tata Steel (Rs 328.4)

The stock achieved the targets mentioned in this column by gaining 6.8 per cent last week. Most of the gains came on Friday as the stock jumped 6 per cent with good volume, breaching its 200-day moving average and the key resistance at Rs 320 levels. Traders with short-term perspective can buy the stock with stop-loss at Rs 318. The stock can extend its uptrend to Rs 340 and then to Rs 350 in the short-term. Indicators in the daily charts are now featuring in the bullish zone.

Since its August 2013 trough at Rs 195, the stock has been on a medium-term uptrend. This trend will remain in place as long as the stock trades above Rs 250 levels. The significant supports to watch are at Rs 310, Rs 288 and Rs 270.

Published on October 19, 2013
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