Technical Analysis

High Five - SBI (₹1,904.2)

Yoganand D. | Updated on April 06, 2014 Published on April 06, 2014


Last week, SBI had a volatile session, testing its significant long-term resistance at ₹1,900. The indicators in the daily chart are loosing bullish momentum and, hence, we cannot rule out a minor correction in the near term. Volumes in the daily chart are also decreasing. In such a scenario, the stock can fall to ₹1,800. Traders with a short-term perspective should remain cautious in the ensuing week. Only a decisive breakthrough of the current resistance level will pave the way for an upmove to ₹2,000 and then to ₹2,100 in the short term. We restate that investors with a medium-term perspective can hold their long positions with a stop-loss at ₹1,650. Subsequent supports below ₹1,800 are pegged at ₹1,700 and ₹1,600.

ITC (₹345.1)

The stock of ITC plunged 3.8 per cent accompanied by good volumes in the previous week. It formed a bearish engulfing candlestick pattern in the weekly chart. This pattern indicates a short-term trend reversal. The relative strength index in the daily chart has also displayed negative divergence, backing this trend reversal, . The stock has decisively breached its 21-day moving average. Traders with a short-term perspective can sell the stock in rallies with a stop-loss placed at ₹354. Short-term targets are ₹335 and ₹330. An emphatic fall below the key support at ₹330 will mar the short-term uptrend and drag the stock down to ₹320 or ₹310 in the medium term. Investors with a medium-term perspective can take profits off the table and exit the stock for the time being. Significant resistances are pegged at ₹354 and ₹362.

Infosys (₹3,315.5)

After taking support from the key base zone between ₹3,200 and ₹3,220, the stock gained 1.8 per cent last week. This zone is also coinciding with a key Fibonacci retracement level and an important long-term base. The stock’s 200-day moving average is also poised around this support band. Traders with a short-term perspective can hold the stock with a stop-loss at ₹3,220. Targets are ₹3,350 and ₹3,450. Key resistance levels beyond ₹3,450 are placed at ₹3,550 and ₹3,650 . Conversely, a strong decline below ₹3,200 will reinforce a bearish momentum and pull the stock down to ₹3,100 or ₹3,000. Investors with a medium-term perspective can remain invested as long as the stock trades above ₹3,000.

Reliance Industries (₹944.2)

RIL gained 3.3 per cent with good volumes last week, decisively moving out of a key medium-term resistance at ₹925. However, after reaching its next key resistance at ₹950, the stock is witnessing selling pressure. Traders with a short-term perspective can desist trading in the stock as its short-term outlook is unclear. A strong rally above ₹950 will take the stock higher to ₹968 and then to ₹980. But a downward reversal from the current resistance can pull it down to ₹925 and then to ₹900 in the short term. The medium-term trend is now turning bullish and the stock has the potential to reach ₹1,000 in the ensuing months.

Tata Steel (₹401.9)

Tata Steel rose 5.5 per cent accompanied by good volumes last week. Since taking support at ₹340 in mid-March, the stock has been on a short-term uptrend. It is hovering well above its 50- and 200-day moving averages. But the stock is now poised for a key resistance at ₹400. A conclusive rally above this level can push the stock higher to ₹420 in the short term. Traders can buy the stock with a stop-loss at ₹388. Resistance above ₹420 is at ₹430. The indicators in the daily chart are featuring in the bullish zone backing the stock’s short-term uptrend. Key support levels to watch out are at ₹390, ₹380 and ₹370.

Published on April 06, 2014
This article is closed for comments.
Please Email the Editor