Bellwethers: Infosys, ITC, SBI, RIL, Tata Steel

Bias remains positive for Infosys

Infosys was volatile, oscillating around the psychological ₹1,000 mark all through the week. The bias on the charts continues to remain positive. Key support is in the ₹980-₹970 region, which can limit the downside in the short term. The stock will come under renewed pressure only if it declines below ₹970. Such a break will increase the likelihood of the stock revisiting ₹900 levels. But such a strong fall looks unlikely at the moment. Immediate resistance is at ₹1,020. A strong break above can take Infosys higher to ₹1,050 initially. Further break above ₹1,050 will pave way for the next target of ₹1,075. Such a rally will also give an initial signal of a trend reversal in the stock. But a reversal from ₹1,050 may trigger a pull-back move to ₹1,000 or even lower levels. Investors with a long-term perspective can buy the stock. Investors going long now will need to have patience to digest a possible prolonged sideways move between ₹900 and ₹1,050 or even a fall below ₹900 to ₹850 or lower. A fall to ₹850 or lower, though unlikely now, is a good opportunity to accumulate long positions.

Near-term view is unclear for ITC

ITC fell 2.6 per cent in the first two trading days of the week. However, the stock found support around ₹261 and managed to recover some of the loss. The immediate outlook is mixed. Support is at ₹261 and resistance is around ₹269. A breakout on either side of these levels will decide the next leg of move for the stock. A strong break below ₹261 can take the stock lower to ₹257 initially. Further break below ₹257 may increase the downside pressure and drag it lower to ₹250 or even lower thereafter. On the other hand, if ITC manages to sustain above ₹261, a range bound move between ₹261 and ₹269 is possible for some time. An eventual break above ₹269 may ease the downside pressure and take the stock higher to ₹275 and ₹280 in the short term. Inability to break above ₹280 may trigger a pull-back move to ₹270 and ₹260 once again. A strong break above ₹280 may boost the bullish momentum for a fresh rally to ₹290 and ₹300. The region around ₹300 is a crucial resistance and whether ITC breaches this hurdle or not will decide the next trend.

Key supports can limit the downside in SBI

SBI was stuck in a narrow range in the past week. Though the stock managed to sustain above the 21-day moving average all through the week, the possibility of a near-term dip below it cannot be ruled out. Near-term support is at ₹267. A break below it can take the stock lower to ₹263 or ₹260 in the coming days. Further fall below ₹260 is less probable. The 55-week moving average is on the verge of crossing the 200-week moving average. This is a bullish signal suggesting limited downside for the stock in the short term. A subsequent reversal from ₹260 can take the stock higher to ₹270 and ₹275 once again. As being reiterated in this column over the last few weeks, the region between ₹288 and ₹290 is a key resistance for the stock. A strong break and a decisive close above ₹290 may give it a fresh boost. Such a break can take SBI higher to ₹300 initially. Further break above ₹300 may target ₹327 over the medium term. Investors can hold the long positions with a stop-loss at ₹220. Revise the stop-loss higher to ₹230 as soon as the stock rises to ₹295.

Bullish outlook is intact for Tata Steel

Tata Steel broke the ₹455-₹480 range on the upside and surged to a high of ₹495.85 last week. But the stock gave back some of the gains from this high and closed 3.7 per cent higher for the week. Inability to bounce above ₹490 from the current levels can take the stock lower to ₹480 or even ₹475 this week. The 21-day moving average at ₹472 is a key support to watch. A strong break below it may increase the likelihood of a fall to ₹460 thereafter. The region between ₹455 and ₹450 is a crucial support zone. The stock will come under pressure only if it declines below ₹450. But such a sharp fall looks less probable at the moment. On the other hand, if Tata Steel manages to bounce from ₹475 or ₹472, it can rise to ₹490 once again. A strong break and a decisive close above ₹490 can boost the momentum for a further rise to ₹503 in the short term. Further break above ₹503 will pave way for the next targets of ₹540 and ₹550. Medium-term investors can hold the long positions. Revise the stop-loss higher to ₹410.

Crucial resistance ahead for RIL

RIL skyrocketed over 13 per cent intra week to breach the ₹1,200 mark for the first time since 2009. The company’s announcement to start charging its Jio customers from April triggered this sharp rally. The stock touched a high of ₹1,222.3 before closing below ₹1,200 for the week. Can this rally sustain? On the charts, ₹1,213 is a crucial resistance to watch. The rally can extend only if RIL manages to break above this hurdle decisively. The next immediate target is ₹1,250. Further break above ₹1,250 will open doors for the next targets of ₹1,330 and ₹1,350. On the other hand, key support is around ₹1,150, which can be tested this week while the stock trades below ₹1,200. A strong break and a decisive weekly close below ₹1,150 can bring the stock under pressure. In such a scenario, a fall to ₹1,100 or even lower levels, going forward, is possible. Medium-term investors holding long positions can book profits for 30 per cent of their holding now. Exit another 20 of your positions at ₹1,145 and keep the stop-loss for the rest of your holdings at ₹1,090.

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