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

SBI to see an intermediate dip before further rise

(₹188.95)

Contrary to expectations, SBI fell last week, closing 5.5 per cent lower for the week. It made a high of ₹202.5 and fell sharply thereafter. Technically, the 50 per cent Fibonacci retracement resistance at ₹200 has been restricting the upside in this stock for more than a month. A strong break and a decisive close above this level can boost the bullish momentum . Immediate support is at ₹182, which is likely to limit the downside. A strong reversal from this support can take the stock higher to ₹203. A strong break above ₹203 can take SBI higher to ₹210 and ₹212 thereafter. Short-term traders can go long on a reversal from ₹182. Stop-loss can be kept at ₹177 for the target of ₹198. Revise the stop-loss higher to ₹185 if the stock moves up to ₹190. The short-term outlook will turn negative if it breaks and closes below ₹182 decisively. Such a break can drag it lower to ₹173.

ITC to remain range bound , but with a bullish bias

(₹324.8)

ITC fell to a low of ₹312 but managed to reverse higher and close flat for the week. Last week’s candle reflects indecisiveness in the market. The stock can continue to remain range-bound between the 21- and 100-week moving averages at ₹319 and ₹338, respectively. Within this range, chances are high for the stock to move towards ₹338 in the near term. A breakout on either side of ₹319 and ₹338 will decide the next leg of move. A strong break below ₹319 can drag itto ₹310 or even lower. On the other hand, a break above ₹338 can take it to ₹341 . Further break above ₹341 will pave the way for an upmove to the next targets of ₹355 and ₹360. Medium-term investors can continue to hold their long positions. Retain the stop-loss at ₹310 for the target of ₹357. Short-term investors with high risk appetite can go long on dips near ₹319 with a stop-loss at ₹310 for the target of ₹335.

Near-term is outlook negative for Infosys

(₹1,210.85)

Infosys is not gaining momentum for a fresh rally. The reversal from the intraweek low of ₹1,201 faced resistance at ₹1,242 and the stock lost steam. It is currently hovering above the 21-day moving average support which held well last week. But this support now looks vulnerable . The stock can fall to test the important support between ₹1,195 and ₹1,190. Inability to reverse higher from ₹1,190 will increase the danger of the fall extending to ₹1,170 or ₹1,165. The level of ₹1,165 is a crucial short-term support. Whether Infosys reverses higher or breaks below ₹1,165 will decide the next direction of move. On the other hand, if Infosys manages to reverse higher from ₹1,190 itself, then a rise to ₹1,240 is possible. A break above ₹1,240 can take it higher to ₹1,270. However, the bullish outlook will gain momentum only on a strong break above ₹1,270.

Outlook turns negative for RIL

(₹982.55)

RIL tumbled 5 per cent last week breaking below the psychological ₹1,000 level. The possibility of a rise to ₹1,100, reiterated in this column, has weakened after the 7.8 per cent fall over the past two weeks. This fall has turned the outlook negative for RIL. Key resistances are at ₹1,000 and ₹1,030, which can cap the upside in the near term. A fall to test the next support region between ₹960 and ₹950 looks likely. A strong break below ₹950 will increase the danger of the stock falling to ₹900 thereafter. Short-term traders can go short if the stock reverses lower from ₹1,000. Stop-loss can be placed at ₹1,025 for the target of ₹960. The strong fall in the last two weeks in RIL is very significant as it has increased the possibility of the long-term range-bound move between ₹800 and ₹1,100. The stock can fall to ₹900 or even lower in the coming weeks.

Corrective fall is likely in Tata Steel

(₹350.55)

The uptrend in Tata Steel has paused, as was expected. The region between ₹360 and ₹363 is restricting the upside. A corrective fall to ₹340 and ₹334 cannot be ruled out while the stock trades below this resistance zone. If the stock breaks below ₹334, then the corrective fall can extend to ₹320 or even lower. On the other hand, if Tata Steel reverses higher from ₹334, it can revisit the ₹360-₹363 resistance zone. The 200-week moving average at ₹357 is a key level to watch. A strong weekly close above this level can be cue for resumption of the overall uptrend. A subsequent break above ₹363 will confirm the same and pave the way for the next target of ₹387. Investors with a medium-term perspective can make use of dips to go long near ₹340. Accumulate longs if the stock extends its fall below ₹335. Keep the stop-loss at ₹315 for the target of ₹385.

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