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Near-term view turns negative for SBI
SBI plunged 6.4 per cent last week, breaching an important 21-day moving average support at ₹188.5. The near-term view is negative. Resistance is in the ₹189-192 zone which can cap the upside for the stock in the near term. As long as it trades below this resistance, an immediate fall to ₹179.5 — the 38.2 per cent Fibonacci support level — cannot be ruled out. Further break below this support may see the stock extending its fall to ₹177 or ₹175. But this zone is a significant support and the stock can reverse higher to ₹185 and ₹188 from here. Traders with a short-term perspective can wait for dips and go long at ₹177. Stop-loss can be placed at ₹173 for the target of ₹187. Revise the stop-loss to ₹180 if the stock moves back up to ₹183. The downside pressure will ease on a strong break above ₹189. Such a break may take the stock higher to its key short-term resistance at ₹199. On the other hand, if SBI declines below ₹175, it can fall to ₹171 or may be even lower.
ITC is stuck inside a sideways range
ITC is stuck inside a sideways range between ₹319 and ₹337 for the third consecutive week. A breakout on either side of this range will decide the next leg of move. The stock tested ₹319 — the lower end of the range on Friday and has bounced back marginally. If it manages to sustain this upmove, it will continue to trade range-bound. In such a scenario, a rise to ₹335 and ₹337 — the upper end of the range — is likely this week. A strong break above ₹337 will take the stock higher to ₹340 and ₹342. On the other hand, a strong break below ₹319 can take the stock lower to ₹315 — the 55-day moving average support. This level is likely to hold and limit the downside for the stock in the short term. There is a strong probability of the stock reversing higher from ₹315 to ₹320 and ₹325 once again. Short- and medium-term traders can continue to hold their long positions with the same stop-loss at ₹318 for the target of ₹338 (short term) and ₹355 (medium term).
Infosys is likely to extend its fall
Infosys surged 3.6 per cent on Monday last week and recorded a high of ₹1,249.9. But the stock failed to sustain the momentum and fell 6.6 per cent from the high to close at ₹1,167.35 on Friday, down 3.2 per cent for the week. The 21-day moving average at ₹1,185 and then in the ₹1,195-₹1,200 region will act as strong resistances for the stock. The short-term outlook will remain negative as long as the stock trades below the key level of ₹1,200. A fall to ₹1,150 is possible. A strong break below ₹1,150 can drag the stock further lower to ₹1,130-₹1,120 or even ₹1,100 levels. The 200-day moving average support is near ₹1,100 and the downside is expected to be capped at this level. Short-term traders can make use of rallies to go short at ₹1,182. Stop-loss can be placed at ₹1,197 for the target of ₹1,155. The pressure on the stock will diminish on a strong break above ₹1,200 levels. Such a break can take Infosys higher to ₹1,220 and ₹1,250 once again.
RIL retains its sideways move
Reliance Industries continued to trade within the ₹1,000 and ₹1,055 range for the fifth consecutive week. Within this range, the 21-day moving average near ₹1,030 provided a strong intermediate support for the stock last week. The stock can rise to test ₹1,055 – the upper end of the range this week. A strong break above this range resistance can take RIL higher to ₹1,065. It will also increase the possibility of a rally to ₹1,080 and ₹1,090 levels. On the other hand, ₹1,030-₹1,020 will be an important support zone. A strong break below ₹1,020 can drag the stock lower to ₹1,000 or ₹992. The bias is positive on the charts, and the support at ₹1,020 is more likely to hold. Traders with a short-term perspective and high risk appetite can make use of dips to go long near ₹1,030. Stop-loss can be kept at ₹1,010 for the target of ₹1,065. Accumulate long positions if the stock falls to test ₹1,020. As the stock moves up to ₹1,050, trail the stop-loss to ₹1,035.
Bullish outlook intact for Tata Steel
Tata Steel fell initially last week to a low of ₹308.4, but managed to reverse higher thereafter. It has closed 1.4 per cent higher for the week. The bullish outlook remains intact. A rise to ₹335 and ₹340 is possible in the short term. In the medium term, the stock can target ₹360. Short as well as medium-term investors can continue to hold their long positions. Make use of dips to ₹310 to accumulate long positions in the coming week. Retain the stop-loss at ₹290 for the target of ₹340. Trail the stop-loss to ₹325 as the stock moves higher to ₹335. The 21-day moving average at ₹309 is an important support which is likely to limit the downside in the near term for the stock. However, a corrective fall is possible if the stock breaks below this support. Such a break can take Tata Steel lower to ₹300. Further break below ₹300 levels can drag it lower to ₹285 levels, an important trend support which can limit the downside for the stock. Gurumurthy K
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