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In line with our expectations, the stock rallied and achieved our price target of Rs 850. Encountering resistance at around Rs 850, the stock pared some of its gains on Friday by declining 3 per cent and finished the week with a gain of 2.4 per cent. In the week ahead, the stock can witness a corrective decline and test its immediate support in the band between Rs 800-790 before moving higher. Therefore, traders should tread with caution in the upcoming week. Only a strong move above Rs 850 will be a cue for initiating fresh long positions and the stock can rally to Rs 870 and Rs 892 levels.
On the other hand, a tumble below Rs 790 will pull the stock down to Rs 765 and Rs 750. The medium-term trend is unaltered. A conclusive move above Rs 900 will reverse the downtrend and take the stock upwards to Rs 950 and Rs 1,000.
State Bank of India (Rs 1,954.9)
The stock reversed lower from Rs 2,050 and ended the week by declining 2 per cent. As the stock has significant long-term support in the band between Rs 1,870 and Rs 1,900, it is likely to consolidate sideways in the range between Rs 1,870 and Rs 2,080 before moving in a clear direction. Short-term traders can desist trading in the stock as long as it wavers in the aforementioned range. However, a strong move beyond Rs 2,080 can lift the stock higher to Rs 2,150 and Rs 2,200 levels. Next resistances are positioned at Rs 2,300 and Rs 2,500.
The medium-term trend is down for SBI from its April peak of Rs 2,959 levels. A decisive plunge below Rs 1,870 will pave the way for the stock sliding to Rs 1,750 and then to Rs 1,600 in the medium-term.
Tata Steel (Rs 476.9)
As anticipated , the stock failed to move above the key resistance level of Rs 500 last week, which resulted in a corrective decline to the initial levels of Rs 475. A weak start in the ensuing week and a decline below Rs 470 can drag Tata Steel lower to Rs 450. In this case, traders can initiate fresh short positions with tight stop-loss. Supports below Rs 450 are pegged at Rs 420 and Rs 410. However, an upward reversal can encounter resistance at Rs 500 once more.
We adhere to the view that a strong breakthrough of the resistance at Rs 500 will lift the stock upwards to Rs 520 and then to Rs 547 in the approaching weeks. A resounding jump above Rs 550 will quash the stock's medium-term downtrend and lift it higher to Rs 590 in the medium-term.
Infosys (Rs 2,271.2)
Infosys slipped 1.9 per cent in the previous week. Traders with a short-term perspective can consider holding short positions with stop-loss at Rs 2,340 levels. Downward targets are Rs 2,200 and Rs 2,169. Resistances for the week are at Rs 2,350 and Rs 2,400. Significant advance above Rs 2,400 can push the stock northwards to Rs 2,500.
However, its medium-term trend continues to be down since the April 2011 peak of Rs 3,300. We restate that a breach of Rs 2,169 will drag the stock lower to Rs 2,100 and then to Rs 2,000 in the medium-term.
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