The stock declined breaching its key support at ₹2,500 and reached the specified price targets mentioned in this column last week. However, taking support at ₹2,350, the stock recouped some of the loss and closed the week with a decline of 4.9 per cent. As long as the key support at ₹2,350 holds, the stock could move sideways in the band between ₹2,350 and ₹2,600. Traders with a short-term horizon should be cautious. A breakthrough in either direction will determine the next medium-term trend. Conclusive fall below ₹2,350 can pull the stock down to ₹2,250 and then to ₹2,100 in the medium term. But, a strong rally above ₹2,600 can reinforce bullish momentum and take the stock northwards to ₹2,750 and then ₹2,850 in the medium term. Investors with a medium-term perspective should also stay cautious as long as the stock trades in the sideways range.

ITC (₹371.7)

ITC surged 3.4 per cent breaking a significant resistance at ₹360 in the week ago. The stock moved in line with expectations and is currently pausing at a key resistance level of ₹375. The short-term outlook is bullish. It trades above its 50- and 200-day moving averages. The indicators in the daily chart are featuring in the positive territory. Traders with a short-term perspective can consider holding their long positions with a stop-loss at ₹360. Continuation of the uptrend can take the stock higher to ₹386 and then to ₹400 in the medium term. Since taking support at ₹312 in late June, the stock has been on a medium-term uptrend. Investors with a medium-term horizon can also stay invested with a stop-loss at ₹345. A fall below ₹345 will mar the medium-term uptrend. Supports below this level are at ₹335 and ₹330. Immediate supports are at ₹365 and ₹355.

Infosys (₹3,681.2)

The stock was volatile and fell marginally by ₹20 in the week ago. The short-term trend has been sideways in the range between ₹3600 and ₹3800. The moving average convergence divergence indicator in the daily chart continues to display negative divergence, indicating that trend reversal is on the cards. Therefore, investors with a short- as well as medium-term perspective can wait on the sidelines. A strong decline below ₹3,600 levels can pull the stock down to ₹3,550 and ₹3,450 levels in the coming week. Only in this scenario can traders initiate short position with a stop-loss at ₹3,700. The stock needs to emphatically fall below ₹3,450 levels for change in trend. Subsequent supports are at ₹3,350 and ₹3,200 levels respectively. Key resistances for the stock above ₹3,850 are at ₹3,900 and ₹4,000 levels respectively.

RIL (₹933.6)

The stock of RIL plunged 6 per cent accompanied by good volume last week. The stock has conclusively broken through a key support at ₹960 as well as the 200-day moving average. Now, it trades well below its 21- and 50-day moving averages. The medium-term downtrend that commenced from the May 2014 peak of ₹1,142 remains intact and has been strengthened. The indicators in the daily chart feature in the bearish zone, backing the stock’s downtrend. Traders with a short-term perspective can hold their short position with a stop-loss at ₹955. The stock can decline to ₹920 and ₹900 in the coming weeks. On the other hand, a conclusive rally above the immediate resistance at ₹960 can take the stock higher to ₹980 or ₹1,000. But this will only be a corrective rally. To alter the downtrend, a strong rally above ₹1,040 is required.

Tata Steel (₹474.2)

Last week, the stock of Tata Steel nosedived 11 per cent to record an intra-week low at ₹451 before recovering some loss and closing the week down 7 per cent. The short-term trend is down. The stock hovers well below its 21- and 50-day moving averages. Indicators feature in the bearish zone. Traders can make use of the rallies to initiate fresh short position with a stop-loss at ₹500. Resumption of the short-term downtrend can pull the stock down once again to ₹460 and then to ₹440 in the upcoming weeks. Further, a decisive fall below ₹440 will strengthen the downtrend and pull the stock down to ₹426, ₹410 and ₹400 in the medium term. Investors with a medium-term horizon can stay on the sidelines and re-enter at a later stage. Important resistances to note are placed at ₹500, ₹510 and ₹530 levels.

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