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RIL slipped 2.5 per cent along with the broader market sell-off in the previous week. Since early March this year, the stock has been in a sideways consolidation phase in the wide band between Rs 765 and Rs 855. As long as the stock trades within this range, short-term traders should tread with caution. Only a breakout on either side will signal a clear medium-term trend.
Strong fall below Rs 765 will reinforce the stock’s medium-term downtrend that has been in place from its January peak of Rs 954. In that scenario, the stock can decline to Rs 736 or to Rs 706 in the medium-term.
On the upside, the stock has immediate resistances at Rs 830 and then at Rs 855. Decisive move above Rs 855 will alter its medium-term downtrend and take the stock higher to Rs 900 or Rs 920 in the medium-term. Key immediate supports are at Rs 780 and Rs 765.
State Bank of India (Rs 1,990.4)
The stock slipped 2.7 per cent with good volume, resuming its short-term downtrend in the previous week. It will remain in a short-term downtrend as long as it trades under Rs 2,186 levels. The stock is currently testing its key support band between Rs 1,975 and Rs 2,000.
Strong decline below this band will take the stock down to Rs 1,944 or to Rs 1,900 in the near future. Traders with a short-term perspective can initiate fresh short positions in that scenario with stop-loss at Rs 1,990 level. Important support below Rs 1,900 is at Rs 1,800.
Key resistances ahead are at Rs 2,065, Rs 2,150 and Rs 2,186. Medium-term trend has been sideways for the stock from January 2012 in the range between Rs 1,800 and Rs 2,500. Significant long-term support below Rs 1,800 is at Rs 1,571 level.
Infosys (Rs 2,419.1)
The stock was volatile and formed a spinning top candlestick pattern in the weekly chart signalling indecisiveness. As long as the stock trades above its immediate key support at Rs 2,300 its short-term uptrend stays in place. Rebound from this support or from the current levels can take the stock higher to Rs 2,550 or Rs 2,625 in the ensuing weeks. An emphatic rally beyond Rs 2,625 will pave way for a rally to Rs 2,700. We restate that investors with a medium-term horizon can consider buying the stock with stop-loss at Rs 2,200 levels.
On the other hand, a sharp decline below Rs 2,200 will drag the stock down to Rs 2,000 in the medium-term time frame. Key immediate resistance for Infosys is at Rs 2,500.
Tata Steel (Rs 271.6)
Last week, Tata Steel was very volatile, registering an intra-week high at Rs 293 before giving away all its gains. Medium- and short-term trends are still down for the stock. The daily indicators are featuring in the negative territory along with the weekly indicators.
The daily relative strength index has re-entered the bearish zone from the neutral region and weekly the RSI is featuring in the oversold area. We reaffirm that short-term traders should tread with caution in the upcoming week.
Significant resistances are positioned at Rs 290, Rs 300 and Rs 320. The stock’s short-term trend remains down as long as it trades below Rs 320 levels. Important support is at Rs 266. A conclusive decline below this support will pull the stock down to Rs 250 in the forthcoming weeks.
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