Technical Analysis

Weekly trading guide

Gurumurthy K | Updated on April 21, 2019 Published on April 21, 2019

Outlook turns negative for SBI (₹310.9)

 

SBI is facing resistance near ₹320. The stock fell over a per cent last week. An inability to breach ₹320 keeps the bias negative. A key support is at ₹307, but SBI looks vulnerable to break it. A break below ₹307 can take the stock lower to ₹300 in the near term. A bounce from ₹300 can see a relief rally to ₹305-307, but a break below ₹300 will increase the likelihood of the fall extending to ₹290 or even lower. Traders holding long positions at ₹315 and ₹308 should remain cautious. Move the stop-loss higher to ₹305. Exit the trade at ₹313 if the stock moves up from the current levels.

ITC hovers above key support (₹304.3)

 

ITC fell sharply after making a high of ₹310, and gave back all the gains made last week. The near-term outlook is unclear. An immediate support is in the ₹303-302 region. If ITC sustains above this support, a bounce to ₹310 is possible. In such a scenario, a range-bound move between ₹302 and ₹310 can be seen. A strong break above ₹312 is needed for ITC to gain fresh momentum and resume the current uptrend towards ₹320 and ₹325. But if it declines below ₹302, ITC can come under pressureand decline to ₹297. A further break below ₹297 can then drag it to ₹292 and ₹290.

Near-term view negative for Infosys (₹716.4)

 

 

Infosys tumbled over 4 per cent last week. The stock can fall further to test ₹705 and ₹703 in the near term. A bounce from the ₹705-703 support zone will give a breather and take Infosys higher to ₹715 and ₹720 again. But a strong break and a decisive close below ₹703 will increase the downside pressure. Such a break will turn the outlook bearish and take Infosys initially lower to ₹690. A further fall below ₹690 will then increase the likelihood of the stock testing ₹680 or even lower on profit-booking. It will also turn the possibility high of the stock tumbling to ₹650 over the short term.

RIL snaps two-week fall (₹1,382.9)

RIL snapped its two-week fall and surged over 3 per cent last week. The outlook is bullish. A test of ₹1,400 is likely in the near term. A decisive close above ₹1,400 will boost the bullish momentum. In such a scenario, RIL can surge to ₹1,460. A further break above ₹1,460 will then increase the possibility of the stock targeting ₹1,520 over the medium term. But if RIL reverses lower from ₹1,400, it can again fall to ₹1,350 and ₹1,320. In that case, it can remain range-bound between ₹1,320 and ₹1,400 for some more time. A breakout on either side of ₹1,320 or ₹1,400 will decide the next move.

Downside to be limited in Tata Steel (₹542.8)

 

Tata Steel is range-bound between ₹525 and ₹560. Within this range, a dip to ₹535 and ₹530 is likely in the near term. A break below ₹530 looks less likely as the bias and indicators on the charts are positive, suggesting the downside could be limited. But if Tata Steel declines below ₹530, a fall to ₹520 and ₹510 is possible. A bounce from ₹530 will see it moving higher to revisit ₹560 levels. A strong break above ₹560 will take the stock further higher to ₹570 and ₹580.

The writer is Chief Research Analyst at Kshitij Consultancy Services

Published on April 21, 2019

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.