Technical Analysis

Pivotals - Reliance Industries (Rs 793.1)

YOGANAND D. | Updated on April 27, 2013 Published on April 27, 2013




RIL was choppy in the previous week. After making a blip above key resistance at Rs 800 it fell steeply 3 per cent on Friday. The stock is trending sideways at a key trend-deciding area; therefore, short-term traders should tread with caution in the ensuing week also. The stock needs to conclusively rally above Rs 800 and also above its 200-day moving average poised at Rs 812 to display initial signs of trend reversal. Subsequent resistances are positioned at Rs 840 and Rs 860. As long as the stock trades below Rs 880 level, its short-term trend will remain down. An emphatic up move above this level will accelerate it northwards to Rs 900-920 levels.

On the downside, a plunge below Rs 760 will pull the stock down to Rs 740 in the short-term.

State Bank of India (Rs 2,289.4)

The stock was volatile and ended on an almost flat note the past week. It is testing key resistance at Rs 2,300 and its daily indicator is displaying negative divergence. A strong decline below its immediate support at Rs 2,260 will be a cue for initiating short position with stop-loss at the same level. In that case, the stock can decline to Rs 2,200 and to Rs 2,100 in the near-term.

On the other hand, strong breakthrough of the above mentioned key resistance will mitigate the negative divergence and take the stock higher to Rs 2,400 in the short-term. Significant resistances beyond Rs 2,400 are at Rs 2,450 and Rs 2,550.

Infosys (Rs 2,212.3)

Last week, Infosys fell 3.6 per cent conclusively breaching its key support at Rs 2,300. Medium as well as short-term trends for the stock are down. Both its daily and weekly indicators are featuring in the bearish zone. Short-term traders can initiate fresh short position with stop-loss at Rs 2,260. Downside targets are Rs 2,150 and Rs 2,100.

However, strong rally above its immediate resistance at Rs 2,300 will reinforce near-term bullish momentum and push the stock higher to Rs 2,350 or to Rs 2,400 in the near future. Hence, traders with short-term perspective should tread with caution in the truncated week ahead. Next key resistance above Rs 2,400 is at Rs 2,500.

Tata Steel (Rs 304.5)

In the previous week, the stock moved slightly higher and retreated to test its key support at Rs 300. We restate that though the stock’s short-term trend is down, daily indicators are displaying positive divergence signalling that a potential trend reversal is in the offing. Nevertheless, the stock needs to emphatically move above Rs 320 to alter this downtrend. We notice that there is an increase in daily volumes in the past three weeks. A decisive rally above Rs 320 can push the stock higher to Rs 335 or to Rs 345 in the upcoming weeks. The next important resistance is at Rs 365.

An emphatic rally beyond Rs 390 will alter the stock’s medium-term downtrend and take it northwards to Rs 420 levels. On the contrary, decisive decline below Rs 300 can pull the stock down to Rs 270 in the medium-term.

Published on April 27, 2013
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