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Accompanied by extraordinary volumes, the stock of ITC surged 2 per cent last week. Since early August, the stock has been consolidating sideways in the range between ₹310 and ₹331. Currently, the stock is testing the upper boundary of this sideways range. It also faces its 200-day moving average at around ₹335. The daily relative strength index has entered the bullish zone from the neutral region. Both the daily and weekly price rate of change indicators hover in the positive terrain, implying buying interest. Therefore, traders with a short-term view should tread with caution as long as the stock tests and remains in the sideways range. Only a conclusive breakout will be a cue for initiating long positions, with stop-loss at ₹325. Such a breakout can take the stock higher to ₹340 and ₹350. Key supports are at ₹320, ₹310 and ₹300 levels.
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