Tata Steel may reverse higher after a dip (₹369.8)
Contrary to the expectations of for a rise, Tata Steel fell 5.7 per cent and gave back all the gains made in the week earlier. The stock has failed to sustain the break above ₹387. It has also closed breaking below the 21-day moving average support at ₹374, implying a negative which leaves the near-term view negative. A fall to test the next support at ₹359 looks likely this week. A reversal from this support can take the stock higher to ₹375. Further break above ₹375 will ease the downside pressure and push it higher to ₹390 and ₹395 once again. But a break below ₹359 can take the stock lower to ₹356 — the neckline support of the inverted head and shoulder pattern or ₹352. These two levels are the key supports which are likely to halt the fall. A reversal from here will see the resumption of the broader uptrend that has been in place since February. Medium-term investors can hold the longs and accumulate on dips near ₹355. Retain the stop-loss at ₹310.
Series of supports to limit the downside for SBI (₹246.7)
The rally in SBI has paused as expected, but well before testing the resistance at ₹264. The stock made a high of ₹260.5 and reversed sharply to close 4.6 per cent lower for the week. Immediate support is at ₹246 — the 100-week moving average. A reversal from the current levels may keep the stock range-bound between ₹245 and ₹260 in the near term. But a break below ₹245 can take SBI lower to ₹242 and ₹239 — the 21-day moving average. Further fall below ₹239 can drag it to ₹235, a key short-term support that is likely to halt the fall in the stock. Also, the broad region between ₹235 and ₹225 is a strong support zone and SBI is unlikely to decline below it. Medium-term investors can buy in small lots at current levels. Accumulate more on dips near ₹240 and ₹235. Keep the stop-loss at ₹205. A strong break above ₹260 will boost the momentum and take the stock beyond the Fibonacci retracement resistance at ₹264. Such a break will pave the way for the target of ₹275 or even higher.
Cluster of supports to limit the downside for RIL (₹1,027.7)
RIL is stuck inside the ₹1,000-1,045 range for the third consecutive week. The region between ₹1,000 and ₹985 will continue to remain as a key support zone for the stock. As long as RIL trades above this zone, there is no danger of seeing a any fresh fall. A strong break and a decisive daily close above ₹1,045 will boost the momentum. Such a break will increase the possibility of a rally to ₹1,060 or ₹1,070. Further break above ₹1,070 will take RIL to the next target of ₹1,100 or even higher over the medium term. Short-term investors can hold the longs and accumulate on dips near ₹1,000. Retain the stop-loss at ₹975 for the target of ₹1,060. The outlook for the stock will turn negative only if it declines decisively below ₹985. Such a break can take RIL lower to ₹950 or ₹935. But such a fall looks unlikely as there is a cluster of supports on the daily chart between ₹1,000 and ₹990. So there is a stronger likelihood of RIL breaking above ₹1,045 and rising to ₹1,070 or ₹1,100 levels in the coming weeks.
Bearish outlook is intact for Infosys (₹1,020.7)
Infosys witnessed a strong bounce back in the initial part of last week. But it was short-lived as the 21-day moving average, currently at ₹1,058, halted this up-move. After reaching a high of ₹1,061.95, the stock reversed sharply lower and fell almost 4 per cent from its high. The resistance around ₹1,060 mentioned last week has held well as expected and kept the bearish outlook intact. This level will continue to remain a key near-term resistance and can cap the upside in this stock. Immediate support is at ₹1,015, which is likely to be broken early this week. Such a break can take the stock lower to ₹1,000. Further fall below ₹1,000 will see Infosys tumbling to ₹950 or ₹925. The 200-week moving average at ₹925 and the 50 per cent Fibonacci retracement level are key supports. If the stock manages to reverse higher, a bounce back to ₹1,000 is possible. But a decisive close below the 200-week moving average support will increase the possibility of the downmove extending to even ₹850.
ITC retains its sideways consolidation move (₹253.7)
ITC remained range-bound for the seventh consecutive week. Within the broad ₹245-₹262 range, the stock was stuck inside a narrow range of ₹249-255 in the past week. There is no change in the view. The downside is expected to be limited to ₹245 in the short term as the presence of the 55-day moving average and a trend line support around this level makes it a strong support. Immediate resistance is at ₹255. A break above it can take it higher to ₹260. The bias continues to remain positive for ITC to break the range above ₹262 in the coming weeks. A strong close above ₹255 will be the first signal confirming of the range breakout, which will then open doors for the next targets of ₹268 and ₹270. Further break above ₹270 may target ₹290. Medium-term investors can hold the long positions and accumulate near ₹245. Retain the stop-loss at ₹228 for the target of ₹270. But if the stock breaks below ₹245, it can fall to ₹240. Further fall below ₹240 in ITC looks unlikely at the moment.
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.