Weekly trading guide

SBI (₹285.8)

The support at ₹281 is holding well for SBI. The stock made a low of ₹281.5 and has bounced slightly. The price action on the daily chart suggests that SBI lacks fresh sellers to drag it below ₹281. Strong support is seen between ₹283 and ₹280. An immediate fall below ₹280 looks less probable. As long as SBI sustains above₹280, a rise to ₹293 and ₹296 is likely in the near term. A break above the 21-day moving average resistance at ₹288 will pave way for the above mentioned upmove. Inability to breach above ₹296 and a subsequent pull-back move can take the stock lower to ₹285. In such a scenario, the stock may remain range-bound between ₹280 and ₹296 for some time. But a strong break above ₹296 can boost the momentum. It will also increase the likelihood of the stock rallying to ₹305 and ₹310 thereafter. The stock will come under pressure only if it falls decisively below ₹280. Such a fall can drag it to ₹270. Investors hold the long positions and retain the stop-loss at ₹270. Book partial profits at ₹325 and move the stop-loss higher to ₹280 on the rest.

ITC (₹306.3)

ITC fell initially in the past week to record a low of ₹299. However, the stock then reversed higher from its low, recovering all the loss made during the week. While the immediate support is at ₹302, the next is at ₹298. The near-term view will turn negative only if ITC falls below ₹298 decisively. Such a break, though unlikely, can take it to ₹295 initially. A further fall below ₹295 can drag the stock lower to ₹290. Having said that, if the stock manages to sustain above the immediate support at ₹302, a rise to revisit ₹320 levels is possible in the coming days. A strong break and a decisive close above ₹320 will enhance the momentum. It will increase the likelihood of the stock rallying to ₹335 or even ₹340 thereafter. Investors can hold the long positions. Retain the stop-loss at ₹290 and revise it higher to ₹310 as soon as the stock moves up to ₹325. Book profits at ₹330. Short-term traders who have entered long positions on dips at ₹302 and ₹299 last week can move the stop-loss higher to ₹293 and exit the trade at ₹320.

Infosys (₹940.5)

Infosys failed to sustain the momentum after opening on a strong note last week. It faced strong resistance from the 21-day moving average at ₹966 and fell sharply. This leaves the near-term view negative. Immediate resistance is at ₹950. Inability to bounce above this hurdle can take it lower to ₹920. Further break below ₹920 can drag it to the crucial ₹910-₹900 support zone. The downside pressure will ease if the stock manages to reverse higher from this support zone. Such a reversal will keep the broader ₹900-₹1,045 sideways range intact. It will also increase the likelihood of the stock rallying to ₹950 and ₹1,000 levels once again. On the other hand, if Infosys declines below ₹900, it can fall to ₹875 initially. Further fall below ₹875 can see the stock tumbling to ₹850 or ₹830 levels thereafter. The region between ₹830 and ₹800 is a significant long-term support zone for the stock. Such a fall to ₹830-₹800 will be a good opportunity for long-term investors to accumulate long positions. Investors can hold the long positions.

RIL (₹1,387.8)

RIL surged 4 per cent last week breaking above the key ₹1,350-₹1,375 resistance zone. With this rally, the formation of the bullish inverted head and shoulder reversal pattern, which we had highlighted last week, gets confirmed. It also marks the end of the corrective fall that has been in place since April. The neckline of this reversal pattern at ₹1,360 will now serve as a strong support for RIL. A strong break above ₹1,400 will open doors for a fresh rally to ₹1,445, which is a key resistance for the stock. Inability to break above ₹1,445 can trigger a pull-back move to ₹1,400 or ₹1,375. In such a scenario, the possibility of the stock remaining range-bound between ₹1,300 and ₹1,445 cannot be ruled. But a strong break and a decisive weekly close above ₹1,445 can bring fresh strength to the uptrend. It will then increase the likelihood of the stock surging to ₹1,600 levels over the medium-term. Investors can hold the long positions. Retain the stop-loss at the revised level of ₹1,245. Move the stop-loss further higher to ₹1,260 as soon as RIL reaches ₹1,445.

Tata Steel (₹502.1)

Tata Steel was stuck in a narrow range last week above the psychological ₹500 support level. This leaves the near-term outlook unclear for the stock. Immediate support is at ₹498 — the 21-day moving average. A break below it can take Tata Steel lower to ₹490. A further break below ₹490 can drag it to ₹482. On the other hand, a key resistance is at ₹515. This can be tested if the stock sustains above the immediate support at ₹498. However, a strong break and a decisive close above ₹515 is needed for it to gain fresh momentum. Such a break will increase the likelihood of the stock rallying to test the crucial long-term resistance level of ₹535. Whether the stock breaks above ₹535 or not will decide the next trend. The price action after testing ₹535 will need a close watch to get a cue on the next possible move. Investors can hold the long positions. Retain the stop-loss at the level of ₹435. Book partial profits on your holdings at ₹535 and move the stop-loss higher for the rest to ₹460 thereafter.

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