SBI is likely to extend its downmove
SBI (₹301.8) fell for the third consecutive week. The stock was down 1.4 per cent last week. The near-term outlook remains bearish. A fall below ₹300 towards ₹296 and ₹294 is likely in the coming days. If SBI manages to reverse higher from around ₹294, a relief rally to ₹300 is possible initially. A break above ₹300 will ease the downside pressure and take the stock higher to ₹305 or even ₹310 thereafter. But if SBI breaks decisively below ₹294, there is a strong likelihood of the downmove extending further to ₹285. The region around ₹285 is a key short-term support with the potential to halt the current downmove. A strong upward reversal from around ₹285 will increase the possibility of the stock rallying towards ₹300 or even higher thereafter. As such the price action around ₹285 will need a close watch to get a cue on the next leg of move. Traders can hold the short positions. Revise the stop-loss lower to ₹310. Move the stop-loss further lower to ₹303 as soon as the stock moves down to ₹299 for the target of ₹294.
Supports to limit the downside in ITC
ITC (₹267.5) surged over 4 per cent intra-week, breaking above the key resistance level of ₹267 and made a high of ₹273.8 last week. However, it fell back from the week’s high giving back most of the gains to close the week just 1.7 per cent higher. Immediate support is at ₹266. If ITC manages to reverse higher again from this support in the coming days, it can strengthen the bullish momentum and go to ₹272 and ₹273 levels again. A strong break and a decisive close above ₹273 will then pave the way for the next target of ₹280. Even if the stock breaks below ₹266 this week, the next significant supports between ₹264 and ₹263 and then at ₹260 can limit the downside. The outlook will turn bearish only if ITC declines decisively below ₹260, which looks less probable at the moment. Traders can hold the long positions with the revised stop-loss at ₹265 for the target of ₹275. Revise the stop-loss higher to ₹268 as soon as the stock moves up to ₹272. Short-term traders who do not hold any positions can initiate fresh long positions at current levels and also accumulate on dips at ₹264. Keep the stop-loss at ₹259 for the target of ₹280. Revise the stop-loss higher to ₹270 as soon as the stock moves up to ₹274.
Infosys clears the hurdle for a long-term rally
The prolonged wait is over. Infosys (₹1,078.4) finally cleared the key hurdle of ₹1,045 after struggling for over 14 months. The stock surged over 6 per cent last week to close on a strong note above ₹1,045. This gives an initial confirmation that the downtrend that was in place since June 2016 has reversed. Infosys is now all set to target ₹1,350 over the long-term. A near-term dip to ₹1,050-₹1,045 cannot be ruled out before the stock extends its upmove. Strong support is now available in the broad ₹1,045-₹1,000 region. Only a decisive fall below ₹1,000 will turn the outlook bearish. But such a break is unlikely as any intermediate dips in the stock will now attract fresh buyers. Next resistance is at ₹1,120 which is likely to be tested in the short-term. A strong break above ₹1,120 will then clear the way for the next target of ₹1,200 over the medium-term. Investors can hold the long positions. Traders with a medium-term perspective can go long on dips at ₹1,060 and accumulate at ₹1,050. Keep the stop-loss at ₹980 for the target of ₹1,180.
RIL likely to test a crucial resistance level
RIL (₹946.7) surged breaking above the key resistance level of ₹937 last week. The stock was up 2.6 per cent last week. The region between ₹937 and ₹935 will now serve as a strong support for the stock in the near-term. As long as the stock remains above this support zone, there is a strong likelihood of it rallying to test the crucial resistance level of ₹960 in the coming days. Whether it breaks above ₹960 or not will then determine the next move. A strong break above ₹960 will boost the momentum. Such a break will pave the way for RIL to target the psychological ₹1,000 mark going forward. It will also wipe out the threat of the double-top reversal pattern formation on the chart that we have been reiterating in this column over the last few weeks. But if the stock reverses lower from ₹960 it can fall to ₹940 or ₹935 again. The possibility of the stock extending its downmove towards ₹910 or even ₹900 cannot be ruled out. In such a scenario, RIL can remain in the ₹880-₹960 sideways range for some more time.
Uptrend is intact in Tata Steel
After a strong surge for three consecutive weeks, the rally in Tata Steel (₹771) paused last week. The stock was stuck in a narrow range between ₹760 and ₹780 last week. Resistance is around ₹785. As long as the stock remains below this hurdle, an intermediate dip to ₹745 or ₹740 cannot be ruled out. Further fall below ₹740 looks less probable at the moment. A range bound move with a bullish bias between ₹740 and ₹785 can be seen for some time in such a scenario. An eventual break and a decisive weekly close above ₹785 will boost the momentum. Such a break will take the stock higher to the next targets of ₹830 and ₹850. It will also increase the possibility of the stock targeting ₹930 and ₹950 over the long-term. Investors can hold the long positions. Retain the stop-loss at ₹640 and revise it higher to ₹680 as soon as the stock moves up to ₹800. As mentioned last week, investors can consider booking partial profits around ₹900 levels. A trendline support at ₹710 and the 100-day moving average at ₹694 are the key supports for Tata Steel. The outlook will turn negative only if it declines below ₹694 decisively, which looks unlikely at the moment.
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.