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ITC enjoyed a clear Santa Claus rally by surging 7.2 per cent last week. This rally has eased the threat of a fall to ₹200, which we have been expecting over the last few weeks. Immediate resistance is at ₹243, the 21-week moving average. A strong break and a decisively daily close above ₹243 will prevent the possibility of any fresh fall in the stock. Such a break will then pave way for a rally to ₹255. Inability to rise past ₹243 may pull the stock lower to ₹235. In such a scenario, a range-bound move between ₹235 and ₹243 is possible for some time. The near-term view will turn negative if ITC declines below ₹235. It can then target ₹230 or ₹225 thereafter. Technically, the 200-week moving average at ₹226 has been providing strong support for the stock for more than a month now. Also, the stock has found fresh buyers every time it has broken below this support in the last few weeks. So, the stock is expected to come under renewed pressure only if it records a decisive weekly close below this support.
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