Technical Analysis

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

Yoganand D | Updated on January 24, 2018 Published on June 21, 2015






Following marginal gains, SBI tests support band

Last week, the stock started to move upwards. It gained 2.4 per cent for the week, despitea minor blip below the key zone between ₹258 and ₹260. An emphatic downward breakthrough of this support zone is needed to strengthen the downtrend and pull the stock down to ₹250 and ₹241 levels. Next support is at ₹234. However, presence of a key support zone and positive divergence can lead the stock upwards and take it higher to the immediate resistance at ₹268 and ₹270. Only a decisive rally above this level will pave the way for a move to ₹280. Such a rally will keep the stock moving in a medium-term sideways consolidation phase in a wide range between ₹258 and ₹290. Both short and medium-term traders can buy the stock with a stop-loss at ₹254 levels.

ITC bounces back but still tests key base

The stock of ITC advanced 2.7 per cent last week. It continues to test its significant medium-term support between ₹300 and ₹308. This support zone is cushioning the stock for now and a corrective rally is possible in the short term. The stock has a significant resistance ahead at ₹318. A strong move above this level will alter the near-term downtrend and take the stock to ₹331 in the short term. So traders with a short-term perspective can go long at current levels with a stop-loss at ₹295 and exit the stock at the immediate resistance level of ₹318. Though the stock has been on a medium-term downtrend from its late February peak of ₹409, the key support mentioned above is providing base. Medium-term investors can buy with a deep stop-loss at ₹290. Conversely, a strong fall below the current support can pull it down to ₹285 and then to ₹273.

Infosys moves sideways with a key resistance ahead

The stock was volatile and closed on a marginally positive note last week. It faces a crucial resistance at around ₹1,025 which is also where its 200-day moving average line is poised. The indicators in the daily chart are showing mixed signals. Only an emphatic breakthrough of this resistance band will pave the way for an up move to ₹1,050 and then to ₹1,070 levels in the short term. Hence, traders with a short-term perspective should tread with caution and initiate fresh long position only on a strong rally above ₹1,025 levels with a tight stop-loss. But, failure to move beyond ₹1,025 will keep the stock moving sideways in a wide band between ₹970 and ₹1,025. Important support below ₹970 is pegged at ₹950. Investors with medium-term view can desist from trading at this juncture.

RIL on a strong rally, gains 12 per cent

In the previous week, the stock skyrocketed 12 per cent accompanied by good volume, decisively breaching key resistances at ₹900 and then at ₹960. Nevertheless, the stock encountered a significant medium-term resistance at ₹1,000. Therefore, the stock can temporarily witness a corrective decline from this resistance level. So, traders with a short-term perspective can consider holding their long position with a stop-loss at ₹980 or else book profit and re-enter above ₹1,000 levels. Now, both medium and short-term trends are up for the stock. It hovers well above the 50- and 200-day moving averages. Strong break of ₹1000 can take the stock northwards to ₹1,026 and then to ₹1050 levels. Next key resistance is at ₹1,080 levels. But a fall below the immediate support at ₹980 can pull the stock down to ₹960.Investors with a medium-term horizon can hold the stock with a stop-loss at ₹940.

Tata Steel continues to test key support

After a slip below the key support level of ₹300 last week, it bounced up gaining 2.4 per cent. The stock now tests the key support at ₹300 and shows signs of upward reversal. Such an upward reversal could result in a corrective rally and take the stock higher to ₹315 and then to ₹330 which will have bullish implications for the stock. Next resistances are placed at ₹340 and ₹350 levels. But a conclusive fall below the current support will strengthen the stock’s primary downtrend and drag it down to ₹288 initially and then to ₹270 in the short to medium term. Hence, traders with a short-term view should tread with caution at this juncture and consider initiating fresh short position only on a conclusive fall with a stop-loss at ₹310.

Published on June 21, 2015
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