After testing the key resistance band between ₹2,800 and ₹2,850, SBI retreated 7.7 per cent last week. The decline was triggered by negative divergence in the daily relative strength index. Nevertheless, the stock hovers above an important support level of ₹2,500. A decisive breach of this level will be cue for short-term traders to sell the stock with a stop-loss at ₹2,500. Short-term targets are ₹2,400 and ₹2,300. Significant supports below ₹2,300 are placed at ₹2,150 and ₹2,050 levels. However, an upward reversal from the immediate support at ₹2,500 will confine the stock’s movement in the ₹2,500-₹2,850 range. A breakout of ₹2,850 is required to take the stock higher to the psychological resistance level of ₹3,000 in the medium term. Investors with medium-term perspective can stay invested with a stop-loss at around ₹2,250.

ITC (₹341.5)

The movement in the stock of ITC was choppy and ended flat, last week with negative bias. Since the mid-May peak of ₹386, the stock has been on a short-term downtrend. It trades well below its 21- and 50-day moving averages. Volumes in the daily chart are decreasing over the past four trading sessions. The stock continues to test its key immediate support at ₹340. An emphatic decline below this base will pave the way for a down-move to ₹325 and then to ₹310 in the short term. In such a scenario, traders can short the stock with a stop-loss at ₹340. Investors with a medium-term perspective can continue to wait and watch and buy at lower levels. A strong rally above ₹355 is needed to reverse the stock’s short-term downtrend and take it higher to ₹365 and ₹375 in the short-to-medium term.

Infosys (₹2941.5)

The stock’s key support band between ₹3,000 and 3,050 was broken after BG Srinivas, President and member of board of Infosys, resigned from the company last week. The stock was volatile and tumbled 4 per cent in the previous week. With this fall, the stock’s short-term downtrend has strengthened and it can decline to the ₹2,800 levels. The stock hovers well below its 50- and 200-day moving averages. Traders can maintain their short position with a stop-loss at ₹3,000. Significant supports below ₹2,800 are at ₹2,700 and ₹2,600. On the other hand, the ₹3,000-3,050 band has turned into a significant resistance zone. A strong rally above ₹3,050 can help the stock recoup its recent losses, and take it northwards to ₹3,200. But the short-term trend remains bearish as long as the stock trades below the ₹3,350 levels. Investors with a medium-term perspective can sit on the sidelines till the stock shows some clear direction.

Reliance Industries (₹1065.1)

The stock plunged 5.5 per cent in the past week, forming a bearish engulfing candlestick pattern in the weekly chart. This pattern implies short-term reversal in the stock’s trend. Moreover, negative divergence in the daily indicators also implies the same. However, the stock has a key immediate support at ₹1,050 levels which can cushion its fall in the coming sessions. Traders should thus tread with caution as long as the stock trades above ₹1,050. A decisive fall below this level will be cue for initiating short position with a stop-loss at ₹1,050. Targets are ₹1,025 and ₹1,000. However, the medium-term trend will continue to be bullish as long as the stock trades above ₹950. A strong move above ₹1,100 can take the stock higher to ₹1,150 and then to 1,200 in the medium term. Investors with a medium-term perspective can remain invested with a stop-loss at ₹925 levels.

Tata Steel (₹475)

The stock’s movement was choppy and it formed a spinning top candlestick pattern in the weekly chart, implying indecisiveness. Volumes in the daily chart have started to diminish. Other indicators are also showing signs of weakness. The stock is finding it difficult to breach₹485. Hence, traders should tread with caution in the coming week. The inability to surpass this level can pull the stock down to ₹450 in the short-term. Key supports below this level are pegged at ₹430 and 410. Conversely, a positive move above ₹485 can push the stock higher to ₹500 in the same period. Next hurdle is at ₹520. Investors with medium-term horizon can consider holding the stock with a stop-loss at ₹390.

Snapshot

SBI reversing down from a key resistance band

ITC testing support at ₹340 levels.

Infosys resumed its short-term downtrend.

RIL has reversed it short-term uptrend

Tata Steel faces a strong resistance at ₹485

Related Topics
comment COMMENT NOW