Technical Analysis

High Five - SBI (₹1,531.7)

Gurumurthy K | Updated on March 02, 2014 Published on March 02, 2014

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SBI has inched higher for the second consecutive week. But the volumes are low which implies a cautious short-term outlook. Immediate resistance is at ₹1,540. A breach of this resistance will provide a good opportunity for short-term traders to initiate fresh long positions. Stop-loss can be kept at ₹1,490 for the targets of ₹1,600 and ₹1,670. On the other hand, inability to breach ₹1,540 will increase the probability of a fall to ₹1,450 once again. The short-term supports for SBI are placed at ₹1,508 (21-day moving average), ₹1,475 and ₹1,450. The medium-term trend is down. However, the stock has a strong trend-line support at ₹1,420 which can halt and reverse this downtrend. So medium-term investors holding short position should exit the shorts if the stock reverses from ₹1,420. Key resistances are at ₹1,700 and ₹1,800.



ITC (₹327.5)



ITC is continuing to consolidate between ₹308 and ₹332. Short-position can be initiated with a stop-loss at ₹338 if the stock fails to break ₹332 this week. The targets are ₹318 and ₹308. A decisive break above ₹332 can take the stock to ₹355 while decline below ₹308 can take the stock down to ₹290. For the medium-term, ITC is in a broad range of ₹280 and ₹380. The stock is now trading at the mid-point of this range. The medium-term trend can be determined only if the stock breaks out on either side. Medium-term investors can therefore steer clear of this stock.





Infosys (₹3,820.2)





Infosys has risen for the third consecutive week to close 1.8 per cent higher. It has also breached the important resistance level of ₹3,800. The short-term outlook is bullish. Traders can go long with a stop-loss at ₹3,740 for the targets of ₹3,920 and ₹3,960. Next significant support is at ₹3,750. The short-term outlook will turn negative only if Infosys falls below ₹3,750. The subsequent targets will be ₹3,700 and ₹3,670. The medium-term trend is also up. But the stock is nearing its key resistance at ₹4,000. A reversal from here can take the stock lower to ₹3,800 and ₹3,700. Medium-term investors can accumulate with a stop-loss at ₹3,250 in declines. Important support is at ₹3,500.



Reliance Industries (₹799.25)





The stock of Reliance Industries is looking weak. It has dropped 1.5 per cent last week failing to breach the 21-day moving average which is positioned at ₹814.5. Traders can go short with a stop-loss at ₹816. The short-term target is ₹775. Intra-week rallies to the ₹810-815 resistance zone can be considered as an opportunity to add to theshort-positions. The short-term outlook will turn positive only on a decisive close above the 21-day moving average. The target there after will be ₹838. For the medium-term RIL has been ranged between ₹760 and ₹930 and it is now approaching the lower end of this range. Medium-term investors should start initiating fresh long position in ₹780-760 zone with a stop-loss at ₹700.





Tata Steel (₹344)





Tata Steel is in a down trend since January and has tumbled 8 per cent last week. Key short-term resistances are at ₹365 and ₹374. The stock looks vulnerable for a fall to ₹315.Intermediate support is at ₹323, the 200-day moving average. Traders with a short-term perspective can go short with a stop-loss at ₹359 for the target of `315. The medium-term trend is up since the trough formed in August last year. Key medium term support is at ₹315. The trend will remain up as long as the stock trades above this support. A reversal from ₹315 can target ₹450 in the medium-term.











Snapshot





1 SBI should breach ₹1,540 to extend its rally to ₹1,600-1,670.





2 ITC remains ranged and could find resistance at ₹332 this week.





3 Infosys is bullish for the targets of ₹3,920 and ₹3,960 in the short-term.





4 RIL can fall to test its medium-term range support of ₹760 and reverse higher.





5 Tata Steel is weak in the short-term and can extend the fall to ₹315.





Published on March 02, 2014
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