SBI (₹305.4)
SBI was volatile last week. It surged over 5 per cent but fell-back sharply from the week’s high and closed just 2 per cent higher for the week. Supports are at ₹300 and ₹295. The near-term view will turn negative only if SBI declines below ₹295. Such a fall can drag it to ₹288 or ₹286 – a key short-term support. Further fall below ₹286 looks less probable. Having said that, if the stock sustains above ₹295, a range bound move between ₹295 and ₹317 is possible for some time. A strong break above ₹317 can boost the momentumand take the stock higher to ₹327 – a key long-term trend resistance. If the stock manages to breach above ₹327 decisively, the upmove can extend to ₹332 or ₹335. Traders and investors should remain cautious and closely watch the price action once the stock tests this crucial resistance level of ₹327. Traders can hold the long positions with the revised stop-loss of ₹282 and for the target of ₹320. Move the stop-loss higher to ₹302 as soon as the stock moves up to ₹315.
ITC (₹280.7)
ITC fell 3.6 per cent last week. The short-term outlook is bearish. Immediate support is at ₹279. But the stock is vulnerable to break below it and fall to ₹272 — the 61.8 per cent Fibonacci retracement level or ₹271 — the 200-day moving average support. If the stock manages to bounce from the ₹272-₹271 support, a relief rally to ₹280 or ₹282 can be seen. A range-bound move between ₹270 and ₹285 is possible. But if ITC breaks below ₹271 decisively, it can decline to ₹267. Further break below ₹267 can drag it to ₹260. A key long-term support is poised in the ₹260-255 band, which may halt the downtrend. Long-term investors can buy the stock at ₹260. An eventual upward reversal from ₹260 will keep the uptrend that has been in place since March 2016 intact. In such a scenario, the downside pressure will ease and ITC can move up to ₹280 or ₹285. The stock may consolidate in the ₹260-290 band or ₹300 range before a fresh leg of the long-term up-move begins.
Infosys (₹985.3)
Infosys broke above the resistance at ₹1,005 last week as expected. But the stock had failed to sustain higher. It reversed lower sharply from a high of ₹1,021, giving back all the gains made during the week. Immediate resistance is at ₹993. Immediate outlook is not clear. Inability to break above this hurdle can drag it to ₹970 or ₹965 in the coming days. If the stock manages to bounce from the ₹970-₹965 support zone, a bounce back move to ₹1,005 can be seen. A strong break and a decisive close above ₹1,005 can boost the momentum and take it up to ₹1,035 and ₹1,045. A downward reversal from ₹1,045 will increase the likelihood of the stock falling back to ₹1,000. It will keep the broad ₹900-₹1,045 sideways range, that has been in place since November 2016, intact. But if Infosys breaks below ₹965, it may come under pressure. This can drag it lower to ₹930 or ₹925. Then, the possibility of the stock revisiting ₹910 and ₹900 levels will also increase. Investors can hold the long positions.
RIL (₹1,622.5)
The key medium-term resistance at around ₹1,650 is holding well. RIL surged to ₹1,665 last week but failed to sustain higher and had reversed lower from there. A strong break and a decisive weekly close above ₹1,650 is needed for the upmove to extend further. Inability to bounce from current levels in the initial parts of this week can pull the stock lower to ₹1,600 or even ₹1,580. If RIL manages to bounce higher from ₹1,580, it can move up to ₹1,650. A sideways consolidation between ₹1,580 and ₹1,650 is possible for some time. But if the stock breaks below ₹1,580 decisively, it will signal the beginning of a corrective fall. Such a break can drag RIL lower to ₹1,550 or even ₹1,535 initially on the back of profit booking. Further fall below ₹1,535 will the increase the likelihood of the corrective fall extending to ₹1,500 and ₹1,470. Since the stock has risen sharply in a short span of time, this corrective fall is needed. Investors can continue hold the long positions. Revise the stop-loss to ₹1,565.
Tata Steel (₹575.5)
Tata Steel surged over 4 per cent last week. A key long-term resistance is poised at ₹580. A test of this hurdle looks likely in the coming days. A strong break and a decisive close above ₹580 will pave way for a fresh rally. The stock can then test ₹600 initially. Further break above ₹600 will see the up-move extending to ₹625 and ₹650 levels. On the other hand, if Tata Steel fails to break above ₹580 and reverses lower, it can pull the stock down to ₹540 or ₹535. As mentioned last week, cluster of supports are poised at around ₹535; so, an immediate break below this support level is less probable. As such, a range-bound move between ₹535 and ₹580 is possible for some time in such a scenario. The outlook will turn negative only if the stock declines below ₹535. Such a fall will increase the likelihood of the stock revisiting ₹500 levels thereafter. Investors can hold the long positions. Revise the stop-loss higher to ₹525.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.