SBI (₹227.6)

Over the past three weeks, the stock of SBI has been volatile, moving in a narrow band between ₹224 and ₹232. It ended on a marginally negative note last week. The medium as well as short-term trends continue to be down. Within this downtrend, the stock is moving sideways. The indicators on the daily chart display mixed signals. Therefore, traders with a short-term perspective should tread with caution as long as the stock moves sideways within the aforementioned range. An emphatic breakthrough of the immediate resistance at ₹232 can ease selling interest and take the stock northwards to ₹235 and ₹242 in the near future. In such a scenario, traders can go long with a stop-loss at ₹228. Further rally above ₹242 will alter the short-term downtrend and push the stock upwards to ₹250 or ₹258. Conversely, a slump below ₹224 will reinforce the bearish momentum and drag it to ₹210 and then to the ₹190-₹200 band.

ITC (₹327.3)

Since taking support at around ₹311 in early December 2015, the stock has been in a near-term uptrend. This rally has almost retraced the 38.2 per cent Fibonacci retracement level of its prior downtrend. The stock now faces key resistance ahead at ₹330. The indicators on the daily chart are moving northwards in line with the price action. Traders with a short-term view can initiate long positions on a move above this resistance level with a stop-loss at ₹325. Then, the stock can extend its upmove to ₹335 and ₹342 in the coming week. An emphatic breakthrough of ₹335 will alter the stock’s short-term downtrend and take it northwards to ₹342 and then to ₹350 in the short to medium term. However, inability to move past the immediate resistance at ₹330 can pull the stock down to ₹322 or ₹320 levels. Further decline below ₹320 can bring back selling pressure and drag the stock down to ₹311 or even to ₹300.

Infosys (₹1103.1)

The stock of Infosys extended its narrow sideways movement around the significant resistance zone between ₹1,100 and ₹1,110. It has been testing this resistance zone over the past three weeks. This shows how significant the resistance is, which is also a crucial trend-deciding level. The stock is trading well above its 50- and 200-day moving averages. An emphatic breakthrough of this resistance band is needed to pave the way for an upmove to ₹1,140 and then to ₹1,160 levels in the short term. Hence, traders with a short-term perspective should wait and initiate long positions on a strong breakthrough, with a fixed stop-loss. Having said that, the stock may face some difficulty in moving past the long-term resistance zone between ₹1,160 and ₹1,170. A downward reversal and any declines might find support at ₹1,060 or ₹1,030. But, a decisive fall below ₹1,030 will strengthen the downtrend and drag the stock down to ₹1,000 levels.

RIL (₹1,015)

Last week, the stock of Reliance Industries gained 1.4 per cent, accompanied by strong volumes. Since the September low of ₹826, the stock has been on a medium-term uptrend. The short-term trend is also up. The daily as well as weekly relative strength indices feature in the bullish zone, backing the uptrend. Moreover, the moving average convergence divergence indicator also hovers in the positive territory, implying upward momentum. The stock is comfortably trading above its 50- and 200-day moving averages. Traders with a short-term horizon can make use of dips to buy the stock while maintaining a stop-loss at ₹1,000. A strong rally above ₹1,025 can take the stock to ₹1,050, which is a key long-term resistance level. The short-term trend remains positive as long as the stock trades above ₹966 with immediate supports at ₹1,000 and ₹987. The medium-term uptrend will be under threat if the stock falls below the important base between ₹910 and ₹920.

Tata Steel (₹257.3)

The stock of Tata Steel was choppy and fell 2.4 per cent last week. The near-term rally of the stock is losing strength. A fall below the immediate support level of ₹250 can weaken the stock further and drag it down to ₹240 and then to ₹225 in the short term. The relative strength index on the daily chart has entered the neutral region from the bullish zone, indicating restraint in the uptrend. The daily price rate of change is on the brink of entering the negative territory from the positive territory, indicating selling interest. Therefore, traders with a short-term perspective should tread with caution. They can consider initiating fresh short positions on a strong fall below ₹250 with a stop-loss at ₹255. The short-term targets are ₹240 and ₹225 levels. Further slump below ₹225 will mitigate the short-term uptrend and drag it down to ₹215 or ₹200 in the coming weeks. Key resistances above ₹263 are at ₹270 and ₹281.

Related Topics
comment COMMENT NOW