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ITC (₹280.4)
ITC continued to trade on a mixed note for the second consecutive week. The stock was stuck inside a narrow band between ₹276 and ₹285. The immediate outlook is not clear as the price action on the charts reflects indecisiveness in the market. The stock may remain range-bound between ₹275 and ₹290 for some time. A breakout on either side of this range will then decide the next leg of move. On a big picture, the bias is bullish with a cup and handle pattern on the chart. So downside in the stock could be limited to ₹272 or ₹270 even if it breaks the range below ₹275 in the near term. Having said that, there is a strong likelihood of the stock breaking above ₹290 in the coming days. Such a break can take the stock higher to ₹300 initially. As being reiterated in this column, the region around ₹300 is a crucial resistance. Inability to break above ₹300 may trigger a pull-back move to ₹290 or ₹285. But if ITC manages to surpass the psychological hurdle at ₹300 decisively, it can extend its upmove to ₹339, which is the target level of the cup and handle pattern.
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