Technical Analysis

Pivotals: Reliance Industries (Rs 805.6)

YOGANAND D. | Updated on March 10, 2018 Published on June 01, 2013

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The stock tumbled 3.6 per cent with above average volumes on Friday, giving away most of its initial gains of the previous week.

This decline has breached the stock’s 200-day moving average. Its short-term uptrend appears to have lost strength and the stock is now heading towards the key support band of Rs 750 and Rs 760.

Traders with short-term perspective can short the stock while maintaining stop-loss at Rs 820 levels.

Medium-term trend has been down for the stock from its January 2013 peak of Rs 954.

Strong fall below Rs 750 will reinforce bearish momentum and pull the stock down to Rs 720 and then to Rs 690 in the medium-term. On the upside, the stock has key resistances at Rs 850 and then at Rs 880. A decisive rally above Rs 880 is needed to alter the stock’s medium-term downtrend.

State Bank of India (Rs 2,047.7)

SBI plunged almost 5 per cent with heavy volumes in the previous week. Both medium as well as short-term trends are down for the stock. It is hovering well below its 50 and 200-day moving averages.

The daily relative strength index is featuring in the bearish zone and the weekly RSI is on the brink of entering this zone from the neural region. The daily moving average convergence divergence indicator has signalled a sell and has entered negative territory implying downward momentum.

Both the daily and weekly price rate of change indicators are featuring in the bearish zone indicating selling interest. Short-term outlook is bearish for the stock.

Traders with a short-term perspective can initiate short positions with stop-loss at Rs 2,100. Targets of the week ahead are Rs 1,990 and Rs 1,950 levels.

Subsequent important support for the stock is in the band between Rs 1,825 and Rs 1,850.

Key resistances are placed at Rs 2,140 and Rs 2,200-2,220 band. The stock needs to advance above Rs 2,330 to alter its medium-term downtrend to push it higher to Rs 2,430 levels.

Infosys (Rs 2,407.6)

On Friday, the stock surged 2.8 per cent, strengthening its short-term uptrend. This up-move also breached the stock’s 21-day moving average, indicating initial signs of bullishness. The stock's daily indicators are moving higher in line with the price.

The daily price rate of change indicator is featuring in the positive area implying buying interest. Short-term outlook is bullish for the stock. Traders can consider buying the stock with stop-loss at Rs 2,300. Subsequent targets are Rs 2,500 and then Rs 2,600.

Nevertheless, a strong fall below Rs 2,300 will mar the stock's short-term uptrend and pull it down to Rs 2,200 levels. Next key support is at Rs 2,100.

Tata Steel (Rs 291.8)

Tata Steel plummeted 6.8 per cent accompanied by high volumes in the previous week. With this fall, the stock appears to have resumed its medium-term downtrend that has been in place from its January 2013 peak of Rs 448. It has breached its 21- and 50-day moving averages and is hovering well below those levels.

The daily relative strength index has entered the bearish zone from the neutral region and the weekly RSI is featuring in the bearish zone. Other daily indicators have signalled a sell. We are bearish on the stock from a short-term horizon.

Traders with a short-term perspective can initiate fresh short positions with stop-loss at Rs 304. The stock can decline to Rs 270 in the ensuing weeks. Significant resistances are at Rs 305, Rs 320 and then at Rs 335.

Published on June 01, 2013
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