Weekly Trading Guide

Bullish outlook is intact in SBI

SBI (₹308.8)

 

SBI inched higher in the initial part of the week and then remained range-bound for the rest of the week. The stock closed 2.8 per cent higher for the week. Though the daily candle chart gives a mixed outlook, the weekly chart is bullish. A key near-term resistance is at ₹312. Inability to breach this hurdle and a subsequent fall below ₹303 — the 21-day moving average support — can drag the stock lower to ₹290 in the short term. But the downside is likely to be limited as a break below the ₹290-285 support cluster is unlikely. On the other hand, if SBI manages to break above ₹312, an up-move to ₹320 can be seen. The level of ₹320 is a key short-term resistance. A strong break and a decisive close above this hurdle will boost the momentum. Such a break will increase the likelihood of the stock targeting ₹350 or even ₹370 over the medium term. Medium-term traders can hold the long positions. Retain the stop-loss at ₹283. Revise the stop-loss higher to ₹301 as soon as the stock moves up to ₹318.

Uptrend continues in ITC

ITC (₹319.1)

 

The uptrend in ITC remains intact and is gaining momentum. The stock surged 2.8 per cent last week and closed at a key resistance level of ₹319. A pull-back in the initial part of the week can take the stock lower to ₹315 or ₹312. But further fall below ₹312 looks unlikely at the moment. The levels of ₹312 and ₹307 are significant supports for ITC, which are likely to limit the downside in the short term. A bounce back from either ₹315 or ₹312 will increase the likelihood of the stock breaking above ₹319 decisively. Such a break can take ITC higher to ₹327 — the next crucial resistance level. As mentioned last week, a strong break above ₹327 will give the stock fresh momentum. In such a scenario, ITC will gear up for a fresh rally to ₹360 over the medium term. Investors can hold the long positions and retain the stop-loss at ₹265. Short-term traders who have taken long positions at ₹297 can hold with a stop-loss at ₹303. Revise the stop-loss higher to ₹308 as soon as the stock moves up to ₹321. Book profits at ₹330.

Infosys regains momentum

Infosys (₹1,440)

 

Infosys surged over 4 per cent last week. The 21-day moving average is continuing to provide strong support. This support has been limiting the downside in the stock consistently since April. Immediate resistance is in the ₹1,447-1,450 region. Inability to breach ₹1,450 can trigger an intermediate pull-back move to ₹1,400 or ₹1,390. But a strong break above ₹1,450 can take Infosys higher to ₹1,490 or ₹1,500. The region between ₹1,490 and ₹1,500 is a key resistance. A corrective fall after testing this resistance region cannot be ruled out. Long-term investors can book partial profits at ₹1,480 and keep the stop-loss for the rest of the holdings at ₹1,360. Medium-term investors can hold the long positions, retain the stop-loss at ₹1,360 and book profits at $1,485. The uptrend in Infosys will come under threat only if it declines below the 21-day moving average (₹1,393) support decisively. Such a break will trigger a fall to ₹1,350 . Further break below ₹1,350 can then drag the stock to ₹1,320 or even lower thereafter.

Near-term outlook is negative for RIL

RIL (₹1,240.9)

 

RIL began the week on a positive note and surged about 4 per cent intra-week to record a high of ₹1,328. However, the stock lost momentum and reversed sharply lower, giving back all the gains made and closed 3 per cent lower for the week. The near-term outlook is negative. Resistance is around ₹1,280. As long as the stock remains below ₹1,280, the possibility of the stock breaking below ₹1,229 — the 21-day moving average — is high. Such a break can take RIL lower to ₹1,210 initially. A strong break below ₹1,210 will turn the outlook to negative. In such a scenario, a sharp fall to ₹1,160 or even lower levels is possible on the back of profit-booking. On the other hand, if RIL manages to reverse higher from the immediate support levels of ₹1,229 or ₹1,210, the downside pressure may ease. A bounce-back move to ₹1,260 or ₹1,270 is possible in that case. A decisive break and close above ₹1,270 will bring back the bullish momentum. It will then increase the possibility of the stock revisiting ₹1,300 and ₹1,320.

Tata Steel likely to test a key resistance

Tata Steel (₹601.6)

 

Tata Steel surged 4.6 per cent last week, recovering all the loss made in the earlier week. With this up-move, the stock has regained its strength. Support is in the ₹593-₹590 region, which is likely to limit the downside in the near term. A break below ₹590 can drag the stock lower to ₹570 or ₹565. But such a fall looks less probable as the indicators on the chart are positive . The 21-day moving average has crossed over the 100-day moving average. This is a bullish signal. Immediate resistance is at ₹619 . The possibilityof the stock breaking above this hurdle is high. Such a break can will see the current uptrend extending to ₹625 and ₹635 levels in the coming days. The region between ₹635 and ₹640 is a crucial resistance. A strong break and a decisive weekly close above ₹640 will confirm that the downtrend that has been in place since January has reversed. As such, the price action around the ₹635-₹640 resistance region will need a close watch to get a cue on the direction of the next move.

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