High Five: SBI, ITC, Infosys, Reliance, Tata Steel

SBI (₹230.1)

Last week’s 2.3 per cent gain gave some relief to the stock, following its sharp 10 per cent fall the week before. The stock found support around ₹220 and hovers just above this level. However, the short-term trend is down for the stock. The indicators in the daily chart continue to feature in the bearish zone. Therefore, traders with a short-term perspective should tread with caution in the coming week. Key supports after ₹220 are at ₹210 and ₹200. A strong decline below ₹220 can pull the stock down to its next support levels. Conversely, the stock can witness some buying interest on a break above the immediate significant resistance at ₹240 and can push it higher to ₹250 in the near term. It needs to decisively breakthrough ₹260 levels to alter its short-term downtrend. Such a breach can push the stock northwards to ₹290 levels in the medium term.

ITC (₹313)

The stock of ITC slipped 1 per cent last week, and continues to move in a sideways range between ₹315 and ₹331. It now tests the lower boundary of this sideways consolidation phase with a negative bias. Both the daily and weekly moving average convergence divergence indicators hover in the negative terrain, signalling bearish momentum. Hence, traders with a short-term view should tread with caution as long as the stock trades around the current support level. Initiate fresh short position on a decisive fall below ₹311 with a stop-loss at ₹317 levels. The downtrend can extend and find support at ₹305 and then at ₹300 in the short term. But the stock could continue its sideways movement for some more time. A strong break-out of the upper boundary is needed to strengthen the bullishness and push the stock higher to ₹340 or ₹350 levels.

Infosys (₹1,090.7)

Amidst bouts of volatility, the stock of Infosys advanced 1.6 per cent last week. Nevertheless, it tests a key resistance at ₹1,100 levels. Only a strong rally above this level can push the stock higher to ₹1,120 and then to ₹1,140 levels in the short term. Therefore, trades with a short-term perspective can consider initiating fresh long position on a strong breakthrough of ₹1,100 with a stop-loss at ₹1,085 levels. The indicators in the daily and weekly charts show mixed signals. The stock trades well above its 50 and 200-day moving averages. The medium-term trend will continue to be up as long as the stock trades above the support band between ₹1,050 and ₹1,060. The stock's 200-day moving average is also poised in this band acting as a cushion. A tumble below ₹1,050 will alter the uptrend and drag the stock down to ₹1,030 and then to ₹1,010 levels in the short term.

RIL (₹861)

The stock of RIL snapped its six consecutive weekly decline by surging 3 per cent last week. However, there is no change in the short and medium-term trends which continues to be down. Since July peak of ₹1,067, the stock has been on a medium-term downtrend. This will continue as long as the stock trades below ₹940. The stock hovers well below its 50 and 200-day moving averages. The indicators in the daily charts display mixed signs. The stock now tests its immediate resistance of ₹870. A decisive rally above this level can push it up to ₹900. But this could be a corrective rally. Therefore, traders with a short-term view should tread with caution. A downward reversal from these resistances can once again pull the stock down to ₹840 or ₹820 levels. Next support is at ₹800. Significant resistances above ₹900 are at ₹920 and ₹940.

Tata Steel (₹233)

The stock of Tata Steel witnessed strong buying interest and surged 6.4 per cent accompanied by good volumes last week. But the stock still remains to be in a downtrend across all-time frames — long, medium and short term. Currently, the stock faces key resistance in the band between ₹240 and ₹250. An emphatic breakout of this resistance zone is needed to reinforce the bullish momentum and push the stock higher to ₹265 and then to ₹280 levels in the short term. Traders should remain cautious and initiate fresh long position on a decisive breakthrough of these resistances. On the downside, resumption of the downtrend can find support at ₹215 and then at the key long-term support in the range of ₹195 and ₹200. A fall below this base level will pull the stock down to ₹175 in the medium term.

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