SBI reverses lower from a key resistance (298.1)
SBI extended its upmove, as expected, last week to test the key resistance level of ₹305, but failed to sustain higher. The stock made a high of ₹306.3 and reversed sharply lower on Friday, giving back almost all the gains made during the week. An immediate support for the stock is at ₹295. A break below it can drag the stock lower to ₹288 or ₹286. A further fall below ₹286 looks less likely now. An upward reversal from the ₹288-286 support zone can take SBI higher to ₹295 and ₹300 levels again. Such a bounce will be a good opportunity to enter long positions again from a short-term perspective. A strong break and decisive close above ₹305 is needed for SBI to regain strength. Such a break can take the stock initially higher to ₹310 and ₹315 levels. A further break above ₹315 will then increase the likelihood of the stock extending its up-move to the level of ₹320. The region between ₹315 and ₹320 is a crucial medium-term resistance. Whether SBI surpasses this resistance zone or not will decide the direction of the next move.
Supports to limit the downside in ITC (₹297.7)
ITC sustained above its support at ₹288 and rallied over 2 per cent last week. The ₹300-302 resistance zone is capping the upside now. If ITC continues to trade below ₹300, a fall to ₹295 or even ₹290 cannot be ruled out. But a further fall below ₹290 looks less probable as the indicators on the charts are positive. The 21-day moving average has crossed the 200-day moving average — a bullish sign, indicating that the downside could be limited. As such, a bounce from ₹290 can take the stock higher to ₹300 again. In such a scenario, a range-bound move between ₹290 and ₹302 is possible for some time. An eventual decisive break above ₹303 will boost the momentum. Such a break will trigger a fresh rally, targeting ₹310. It will also keep the possibility high of the stock revisiting ₹320 levels over the medium term. Investors can continue to hold the long positions taken at ₹282, ₹278 and ₹272 with a revised stop-loss at ₹285. Move the stop-loss further higher to ₹297 as soon as the stock moves up to ₹303. Book profits at ₹310.
Infosys gears up for a fresh rally(₹742.15)
Infosys surged over 3 per cent last week, breaking above the crucial resistance level of ₹730. The strong rally in the past week indicates the end of the downtrend that has been in place since February. The weekly chart gives an early sign that a fresh leg of upmove could have just begun. This upmove could be strong as Infosys has risen after forming a strong base between ₹700 and ₹720. The short-term outlook is bullish. The ₹730-727 band will now act as a support and can limit the downside. An upmove to ₹750-₹755 is likely in the near term. A strong break and a decisive close above ₹755 will then increase the likelihood of the upmove extending to ₹780. The bullish outlook will get negated only if Infosys declines below ₹725. Such a break, though unlikely, can take the stock lower to ₹710 or ₹700. Medium-term traders can hold the long positions taken at ₹725, ₹720 and ₹715. Retain the stop-loss at ₹680 for the target of ₹790. Revise the stop-loss higher to ₹735 as soon as the stock moves up to the level of ₹755.
RIL may dip before going up (₹1,342.1)
RIL surged about 5 per cent intra-week but failed to sustain higher. After making an intra-week high of ₹1,386.6, the stock gave back most of the gains and closed 1.5 per cent higher for the week. A near-term support is at ₹1,316. As long as RIL trades below ₹1,350, a dip to test ₹1,316 cannot be ruled out. A break below ₹1,316 can drag RIL further lower to ₹1,300 or ₹1,290. A further fall below ₹1,290 looks less likely as fresh buyers are likely to emerge at lower levels and limit the downside. A bounce from ₹1,316 or the ₹1,300-₹1,290 support zone can take the stock higher to ₹1,350. A further break above ₹1,350 will then increase the likelihood of the stock targeting ₹1,380 and ₹1,400 levels thereafter. The bullish outlook will get negated if RIL declines decisively below ₹1,290. In such a scenario, RIL can fall to ₹1,250. Investors can hold the long positions taken at ₹1,260, ₹1,245 and ₹1,225 with a revised stop-loss at ₹1,320. Move the stop-loss further higher to ₹1,345 as soon as RIL touches the level of ₹1,375. Book profits at ₹1,420.
Tata Steel has a bullish bias(₹518.1)
Tata Steel continued to consolidate for the third consecutive week. The stock has been stuck in a narrow range between ₹505 and ₹532. A breakout on either side of ₹505 or ₹532 will determine the next move. The price action on the chart leaves the bias bullish. The stock is holding well above the 100-day moving average. Additionally, the 21-day moving average has just crossed over the 100-day moving average. This is a bullish signal, indicating that the downside could be limited. It also increases the possibility of the stock breaking the current range of ₹505-532 on the upper side. The ensuing target is ₹540. A further break above ₹540 will increase the likelihood of the stock targeting ₹560. But if Tata Steel declines below ₹505, it can fall to ₹495 or ₹490. Medium-term traders with high-risk appetite can go long at current levels and accumulate on dips at ₹512 and ₹505. Stop-loss can be placed at ₹487 for the target of ₹555. Revise the stop-loss higher to ₹515 as soon as the stock moves up to ₹525.
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.