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.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.