Weekly Trading Guide

Immediate outlook is unclear for SBI (₹252.4)

SBI was stuck in a sideways range for the second consecutive week. The outlook for the stock remains sideways. Immediate support is at ₹249. As long as the stock sustains above ₹249, it can rise to ₹258 or ₹260 this week. Inability to break above ₹260 can take SBI lower to ₹249 again. But if it manages to break above ₹260, it can move up to ₹265 initially. Further break above ₹265 will ease the downside pressure. Such a break will increase the likelihood of the stock targeting ₹274 or ₹278 thereafter. On the other hand, if SBI breaks below ₹249 in the coming days, it can test the crucial ₹246-₹244 support zone. The stock will come under more selling pressure if it breaks below ₹244 decisively. Such a break can drag it to ₹237 or ₹232. As being reiterated over the last couple of weeks, the price action around ₹232 will need a close watch. If SBI breaks decisively below ₹232, it will increase the likelihood of the stock tumbling to ₹200 or ₹190 over the medium- to long-term time frame.

ITC hovers below a key resistance (₹265.8)

ITC was stuck in a narrow range below the crucial resistance level of ₹270 all through last week. Immediate support is at ₹264 and the resistance is at ₹270. A breakout on either side of these levels will decide the next move for the stock. If ITC declines below ₹264, it can fall to ₹260 or ₹257. If it manages to reverse higher from ₹260 or ₹257, an upmove ₹265 and ₹270 is possible. In such a scenario, the ₹257-₹270 sideways range that has been in place over the last three weeks will remain intact. But a strong break below ₹257, will increase the possibility of the downmove extending to ₹250. On the other hand, if ITC manages to sustain above ₹264 in the coming days, it can move up to revisit ₹270 levels. An eventual break above ₹270 will bring fresh momentum to the stock and take it higher to ₹280 initially. Further break above ₹280 can target ₹285. Medium-term traders can hold the long-positions. Retain the stop-loss at ₹262 and move it higher to ₹269 as soon as the stock moves up to ₹275. Book profits at ₹280.

Short-term bullish outlook is intact in Infosys (₹931.9)

Infosys surged, breaking above the key short-term resistance level of ₹920 and made an intra-week high of ₹945.8. But, the stock failed to sustain higher and gave back some of the gains and closed 1.4 per cent higher for the week. However, the short-term outlook continues to remain bullish. The bounce from ₹920 on Thursday suggests that the level of ₹920 is now acting as a good support. As long as Infosys sustains above ₹920, a revisit of ₹945 levels is likely this week. A strong break above ₹945 will pave way for a fresh rally to ₹960. Further break above ₹960 will increase the likelihood of the upmove extending to ₹985 or even ₹1,000 levels thereafter. Investors can hold the long positions. The short-term outlook will turn negative only if the stock declines below ₹920. In such a scenario, a fall to ₹920 or ₹895 is possible. Further fall below ₹895 is less likely at the moment. But if Infosys breaks below ₹895 decisively, it can come under renewed pressure. Such a break can then drag the stock lower to ₹865 or ₹860.

Crucial resistance ahead for RIL (₹876.7)

RIL extended its rally for the second consecutive week. The stock surged 4.7 per cent last week and is up 12 per cent over the last two weeks. A crucial resistance is at ₹894. A strong break and a decisive daily close above this hurdle can boost the momentum. Such a break will then increase the possibility of the stock extending its rally to ₹924 or ₹929. Inability to break above ₹929 can trigger a pull-back move to ₹900 or ₹895 thereafter. On the other hand, if RIL fails to break above ₹894 in the coming days and reverses lower, it can come under pressure. In such a scenario, there is a strong likelihood of the stock falling to ₹850 or even ₹830 on the back of profit booking. The region around ₹830 is a key short-term support, which is likely to limit the downside. An upward reversal from this support can take RIL higher to ₹890 levels again. But if the stock declines below ₹830 decisively, it can fall to ₹810 or ₹800 initially. Further break below ₹800 will increase the possibility of the downmove extending to ₹780 or even ₹770.

Uptrend in Tata Steel gains momentum (₹710.6)

Tata Steel surged for the second consecutive week breaking above the crucial psychological resistance level of ₹700. The stock was up 2.8 per cent last week. The level of ₹700 may now act as a good support. Next key support is inbetween ₹695 and ₹690. The outlook will remain strong as long it trades above ₹690. The 2010 high of ₹737 and the 2008 high of ₹750 are the next targets for the stock, which are more likely to be tested in the coming weeks. A strong break above ₹750 will increase the likelihood of the stock targeting ₹850 or even ₹950 levels over the medium- to long-term. The near-term view will turn negative only if the stock breaks below ₹690. This can take it to ₹685. Further break below ₹685 will increase the possibility of the fall extending to ₹665 or even ₹645. The level of ₹645 is a strong trendline support, which is likely to limit the downside. Investors with a medium- to long-term perspective can go long at current levels. Stop-loss can be placed at ₹630.

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