Near-term view is mixed for SBI

SBI inched higher last week. But the sharp 1.7 per cent fall on Friday wiped out most of the gains made during the week. Though the bigger picture is still positive, the near-term view remains unclear. The daily chart suggests that a dip to ₹270 or even ₹265 is possible in the coming days. A break below ₹265 is less probable. The downside is expected to be limited to ₹262 — the 21-day moving average support even if SBI breaks below ₹265. Immediate resistance is at ₹280. A break above it can take it to the next key short-term resistance at ₹288. The stock would gain fresh momentum on a strong breach above ₹288. The next target is ₹300. Further break above ₹300 will see SBI rallying to ₹327 over the medium term. Investors can hold the long positions. Retain the stop-loss at ₹220 and revise it higher to ₹230 as soon as the stock rises to ₹295. The stock will come under renewed pressure only if it breaks below the 21-week moving average support decisively. Such a break will increase the likelihood of the stock falling to ₹250 thereafter. However, such a strong fall looks unlikely at the moment.

ITC can rise to test a crucial resistance

ITC surged 6.8 per cent last week. The developments on the Goods and Services Tax (GST) front and the market considering the new GST structure for the tobacco industry as neutral gave a boost to the stock on the final trading day. The wide gap-open on Friday is a positive. The levels of ₹276 and ₹272 are the key supports to watch now. The stock will come under pressure only if it declines below ₹272 decisively. But such a fall looks unlikely at the moment. Immediate resistance is at ₹283. A break above it can take it to ₹292 initially. Further break above ₹292 can target ₹300. As being reiterated here over the last few weeks, the region around ₹300 is a key long-term resistance for the stock. A test of this crucial resistance looks evident in the coming weeks. But whether ITC breaks above this hurdle or not will be deciding the next trend for it. A strong break and a decisive weekly close above ₹300 may boost the momentum. In such a scenario, the stock may target ₹335 levels. But inability to break above ₹300 and a subsequent downward reversal from there can trigger a corrective fall to ₹285.

RIL consolidates within its uptrend

RIL rose 1.5 per cent in the past week and has closed higher for the fifth consecutive week. The price action on the daily chart since March 7 suggests that the rally has paused and the stock is in a consolidation phase. ₹1,260 and ₹1,327 is the range within which RIL is consolidating now. A breakout on either side of ₹1,260 or ₹1,327 will decide the next leg of move for the stock. A strong break above ₹1,327 can take the stock higher to ₹1,350 initially. A strong break and a decisive weekly close above ₹1,350 may increase the potential to target ₹1,500 or even ₹1,600 levels over a medium to long-term. Medium-term investors can hold the long positions with a stop-loss at ₹1,145. Revise the stop-loss higher to ₹1,185 as soon as the stock moves up to ₹1,375. On the other hand, if RIL breaks the range below ₹1,260, it can take the stock to ₹1,250 initially. Further break below ₹1,250 may increase the downside pressure and drag the stock lower to ₹1,220 or even lower. As being reiterated in this column over the last couple of weeks, the level of ₹1,200 is a strong support level a break of which is unlikely.

Infosys gears up for a fresh rally

Infosys is getting compressed between the 21- and the 200-day moving averages at ₹1,015 and ₹1,040 respectively. This suggests that a sharp move could be on the cards in the coming days. The price action on the weekly chart makes it evident that the stock is continuing to get fresh buying interest on every dip to the psychological ₹1,000 level. This keeps the bias bullish and the possibility high for the stock to break above the 200-day moving average resistance. Such a break can take Infosys up to ₹1,070 or ₹1,075. Further break above ₹1,075 may target ₹1,090. This level of ₹1,090 is a crucial resistance. If Infosys manages to surpass this hurdle decisively, it will confirm that the downtrend that was in place since last June has reversed and a fresh leg of uptrend has begun. Infosys may revisit ₹1,200 and ₹1,250 levels. It will also increase the likelihood of the stock surging to new highs. Long-term investors can hold the long positions. If Infosys reverses lower from ₹1,090, it may fall to ₹1,075-₹1,070 initially. Further break below ₹1,070 can drag the stock lower to ₹1,050 or ₹1,040 levels once again.

Bullish outlook intact for Tata Steel

Though Tata Steel opened on a weak note, it reversed sharply higher after making a low of ₹462.5 on Monday. The stock surged over 7 per cent. But the price action on Friday leaves a mixed note, suggesting that the stock lacks fresh buying interest to take it decisively above the psychological ₹500 mark. So inability to sustain above ₹500 may drag the stock lower to ₹480 or ₹470 in the coming days. The stock may remain range-bound between ₹460 and ₹505 in such a scenario. If Tata Steel manages to sustain above ₹500, it can rise to ₹515 or ₹517 this week. A strong break above ₹517 will pave way for our long awaited target level of ₹535. But a reversal from ₹517 can pull it back to ₹500 or even lower levels. Overall, the bullish outlook is intact and the stock is on its course to test ₹535-₹540 levels. Medium-term investors can hold the long positions. Retain the stop-loss at ₹410. Book partial profits at ₹530. The stock will come under pressure only if it breaks below ₹460, which looks less probable. In such a scenario, the next target is ₹440 or ₹435.

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