Technical Analysis

Pivotals: Reliance Industries (Rs 801.2)

YOGANAND D. | Updated on May 04, 2013 Published on May 04, 2013





Reliance Industries has been moving sideways for more than a month in the band between Rs 760 and Rs 820. Last week too, the stock was volatile. It is currently testing its 200-day moving average at around Rs 812 levels. Short-term traders should desist from trading in the stock as long as it trades sideways in the aforementioned range. Only a strong break either upward or downward will give clear short and medium-term directions for the stock. Conclusive move above Rs 820 will take the stock to Rs 840 and then to Rs 860 levels. An emphatic rally above Rs 880 will take the stock higher to Rs 900-920 band in the medium-term.

On the contrary, a decisive fall below the lower boundary of Rs 760 will strength the stock’s bearish momentum and drag it down to Rs 740 in the short-term. Key support below Rs 740 is at Rs 710 levels.

State Bank of India (Rs 2,216.5)

On Friday, the stock tumbled 3.6 per cent with above average volume, breaching its immediate support at Rs 2,260 levels. It is in line with our expectations. The daily relative strength index has entered the neutral region from the bullish zone and other daily indicators are weakening. Short-term traders can consider holding their short positions with stop-loss at Rs 2,260. Downside targets are Rs 2,150 and then Rs 2,080-2,100 band.

Key immediate resistance are at Rs 2,300 and Rs 2,340. But a decisive up move above Rs 2,340 will alter the stock’s near-term downtrend and take it higher to Rs 2,400 levels. Key resistances above Rs 2,400 are positioned at Rs 2,450 and Rs 2,550 levels.

Infosys (Rs 2,307.8)

Infosys reversed direction from its intra-week low of Rs 2,190. This reversal is triggered by the positive divergence in the daily relative strength index. It has gained 4 per cent for the week. Moreover, we observe a bullish engulfing candlestick pattern in the weekly charts supporting this reversal. However, the stock has key resistance ahead at Rs 2,350. Only a strong rally above this level will strengthen short-term bullish momentum. Traders with short-term perspective can initiate fresh long positions in that scenario with stop-loss at Rs 2,350. Targets are Rs 2,400 and then Rs 2,500.

As long as the stock trades below its key resistance at Rs 2,600, its medium-term trend remains down. An emphatic up move beyond Rs 2,600 will revise the stock’s downtrend and take it higher to Rs 2,750 in the medium-term. Key supports for the ensuing week are positioned at Rs 2,250 and Rs 2,200.

Tata Steel (Rs 311.2)

Tata Steel advanced 2 per cent accompanied by above average volume, breaching its 21-day moving average on Friday. The stock’s daily indicators are displaying positive divergence signalling that a trend reversal is possible in the near future. Taking a contrarian view, short-term traders can consider buying the stock with stop-loss at Rs 300. The stock can continue to move higher to Rs 320. Further, a strong up move above Rs 320 can take the stock upwards to Rs 335 or to Rs 345 in the ensuing weeks. Key resistance above Rs 345 is at Rs 365 level. Medium-term downtrend will be altered if the stock rallies above Rs 390 and pushes the stock higher to Rs 420.

A fall below its immediate support at Rs 300 will spoil the stock’s trend reversal and pull it down to Rs 270 in the medium-term.

Published on May 04, 2013
This article is closed for comments.
Please Email the Editor