Pivotals: Reliance Industries (Rs 746.40)



After marking a 52-week low at Rs 709 on December 20, the stock bounced up by 3 per cent for the week. This up-move was triggered by a positive divergence in the daily relative strength index. Nevertheless, the stock is currently testing a key resistance band between Rs 750 and Rs 760. New long position can be initiated if the stock penetrates this band decisively. Targets on such a breakthrough will be Rs 780 and then Rs 810. Only a strong move above Rs 810 will reverse the short-term trend and take the stock further higher to Rs 850. However, failure to move above the aforementioned resistance band will pull the stock down and confine it to a sideways movement between Rs 710 and Rs 760 in the short term. The stock continues to be in a medium-term downtrend. Strong weekly close below Rs 700 will drag the stock lower in the medium term to Rs 670 and to Rs 650.

Infosys (Rs 2,694.80)

The stock's choppiness continued last week, too. It has formed a doji pattern signalling neutral stance in the weekly candlestick chart. The key resistance level at Rs 2,700 and its 200-day moving average hovering around Rs 2,755 still remain threats to the stock. Traders need to tread with caution and initiate new long position if the stock moves strongly above Rs 2,755. An up move to Rs 2,850 and to Rs 2,900 is possible in that scenario. On the other hand, failure to do so can pull the stock down to Rs 2,600. Conclusive downward penetration of Rs 2,600 can pull the stock lower to Rs 2,500 and Rs 2,450 in the short term.

We reiterate that as long as the stock trades below Rs 3,000, its medium-term trend stays down. Strong move above this level will alter the downtrend trend and lift the stock to Rs 3,250 and Rs 3,500. Key medium-term support is pegged at Rs 2,380.

State Bank of India (Rs 1,648.30)

SBI registered its 52-week low on December 20 at Rs 1,576 and bounced back to reduce its weekly loss to Rs 32 or 2 per cent. The stock is facing key resistance ahead at Rs 1,715. New long position is recommended only on a decisive move above Rs 1,715 levels. Targets then are Rs 1,776 and Rs 1,810. However, its near-term trend remains down as long as the stock trades below Rs 1,810 levels. Key resistances above this level are at Rs 1,888 and Rs 1,936. Conversely, inability to move above Rs 1,715 will pull the stock down to Rs 1,629 or to Rs 1,576 in the short term.

Medium-term trend has been down for the stock from its July peak of Rs 2,528 levels. Only an emphatic rally above Rs 2,050 will reverse the downtrend. Key medium-term support is at Rs 1,510.

Tata Steel (Rs 347.20)

In line with our expectation, the stock slipped and reached our price target of Rs 350. It has dropped almost 5 per cent with good volumes. The stock is testing its significant support around Rs 350. An upward reversal from the current support will push the stock higher to its immediate key resistance level at Rs 374. Medium and short-term trends are down for the stock. A strong move above Rs 380 is needed to alter the short-tem downtrend and take the stock higher to Rs 400 and to Rs 420.

However, inability to move beyond Rs 374 will pull the stock down to Rs 341 and to Rs 330 in the short term.

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