Pivotals - Reliance Industries (Rs 770.7)

Yoganand D. | Updated on September 24, 2011 Published on September 24, 2011

After hitting the important barrier at Rs 850 on Tuesday, the stock reversed down steeply. In line with our expectation the stock declined and is hovering just above the second target of Rs 759. It breached its 21- and 50-day moving averages and finished the week 6.8 per cent down.

Near-term outlook is bearish for the stock. Short-term traders can hold their short positions with stop-loss at Rs 792. Downside targets are Rs 759, Rs 740 and Rs 730. Conversely, a rally above Rs 800 can encounter resistance at Rs 820 and Rs 850. With last week's decline, the stock appears to have resumed its medium-term downtrend that has been in place since the April peak of Rs 1,065. Strong fall below Rs 730 can pull the stock down to Rs 713 and Rs 700 in the medium-term.

State Bank of India (Rs 1,955.5)

The stock was volatile and formed a spinning top candlestick pattern in the weekly chart signalling indecisiveness. Testing its significant long-term support at around Rs 1,900, the stock ended the week up, climbing Rs 10. It continues to test this support. It has to rally above Rs 2,080 to conclusively indicate that the short-term trend is becoming positive. Further, a decisive weekly move beyond Rs 2,500 is required to make the medium-term view bullish.

The stock will encounter resistance at Rs 2,048 and Rs 2,088 in the ensuing week. But a reversal down from either of these levels will pull the stock down and jail it between Rs 1,800 and Rs 2,100. Strong fall below Rs 1,800 will pull the stock down to Rs 1,726 and Rs 1,708 in the medium-term.

Tata Steel (Rs 432.3)

The stock failed to hold above the short-tem support at around Rs 450 and fell steeply and reached the levels mentioned in our last column. It had tumbled 6 per cent over the week. Daily indicators have entered in to the bearish zone. The stock is hovering well below its 21- and 50-day moving averages. Short-term trend is down for the stock and in the week ahead it can decline to test its immediate support at Rs 419 (August low). Traders can initiate fresh short position with stop-loss at Rs 450. Targets are Rs 419 and Rs 410.

Medium-term trend is down for the stock from its April peak of Rs 641. Emphatic fall below Rs 400 can drag the stock down to Rs 369 in the medium-term. However, to reverse this trend the stock has to move above Rs 530.

Infosys (Rs 2,340.1)

Infosys finished the week declining Rs 53 or 2.2 per cent, after testing its immediate key resistance at Rs 2,400. Short-term traders should tread with caution as long as the stock trades below Rs 2,400 levels. Strong move above this level will lift the stock higher to Rs 2,490 and then to Rs 2,540. Inability to move beyond Rs 2,400 can pull the stock down to Rs 2,270 and Rs 2,200 in the days ahead.

The stock continues to be in a medium-term downtrend from its April peak of Rs 3,316. Nevertheless, a strong move above Rs 2,700 is needed to reverse this trend. Dive below Rs 2,170 will pave way for a decline to Rs 2,000 in the medium-term.

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