Day trading guide

Weekly Trading Guide

Gurumurthy K | Updated on March 10, 2018 Published on November 05, 2017

SBI (₹325)

SBI breached a key intermediate resistance level of ₹316 and closed on a strong note last week. The stock was up 4.5 per cent. Though there is an immediate resistance at ₹216, the outlook is bullish and the stock is likely to break above this hurdle. This break can take the stock higher to ₹342 in the short term. Inability to break above ₹342 can trigger a pull-back move to ₹325 again. But if SBI manages to break further above ₹342, it can gain momentum. Such a break will increase the likelihood of the stock targeting ₹366 over the medium term. Medium-term traders with a high-risk appetite can go long at current levels. Stop-loss can be placed at ₹309 for the target of ₹360. Revise the stop-loss higher to ₹330 as soon as the stock moves up to the level of ₹341. Move it higher to ₹340 as soon as the stock goes up to ₹350. The level of ₹315 will be a significant support to watch in the near term. A break below it can drag the stock lower to the level of ₹300 or even lower on the back of profit booking.

ITC (₹265.4)

ITC fell 1.5 per cent last week. Barring the spike to ₹276 in the last week of October, the stock has been broadly range-bound between ₹263 and ₹272 over the last four weeks. It can test the lower end of this range this week. A bounce from there will keep the sideways range intact and take the stock higherto test ₹272 — the upper end of the range. A breakout on either side of ₹263 or ₹272 will determine the next trend. A break above ₹272 can take the stock to ₹274 initially. Further break above ₹274 will boost the moment and increase the possibility of the rally extending to ₹282 and ₹285 — the 200- and 100-day moving average resistances respectively. On the other hand, if ITC breaks the current range below ₹263, it can fall to ₹260 initially. Further break below ₹260 can then drag the stock lower to ₹252 — the key 100-week moving average support. Short-term traders who have taken long positions last week can hold it. Retain the stop-loss at ₹262 for the target of ₹280.

Infosys (₹926.6)

Infosys fell over 2 per cent last week giving up all the gain made in the previous week. A range-bound move between the immediate support at ₹916 and resistance at ₹930 looks likely in the near-term. A breakout on either side of these levels will decide the next move. A break below ₹916 can take the stock lower to ₹910 or ₹906. On the other hand, if Infosys breaks above ₹930, it can rise to ₹940 or ₹945. Further break above ₹945 will increase the likelihood of the rally extending to the level of ₹956. The 200-day moving average at ₹956 is a key short-term resistance. Inability to break above this hurdle can drag the stock lower to ₹920 and keep it range-bound between ₹920 and ₹956 for some time. But if the stock manages to break above ₹956 decisively, it can gain momentum. Such a break can take the stock higher to ₹985 or even ₹1,000 levels thereafter. On the charts, the bias is bullish and the possibility of the stock rallying above ₹930 is high. Investors can hold the long positions.

RIL (₹945.6)

RIL extended its rally for the fifth consecutive week and was up 1.7 per cent last week. However, it has been unable to break and close decisively above ₹950 for the second consecutive week. Inability to bounce above ₹950 from the current levels can pull the stock lower to ₹925 or ₹920. If the stock manages to sustain above ₹920, it can remain range-bound between ₹920 and ₹950 for some time. As long as it remains above ₹920, the possibility is high to break above ₹950. Such a break will increase the likelihood of the stock targeting the psychological ₹1,000 mark in the coming weeks. On the other hand, if RIL breaks below ₹920 decisively, it can fall to ₹910 or ₹895 thereafter. Cluster of supports are poised around ₹900 and ₹895 which makes an immediate break below these level less probable. But if the stock breaks below ₹895 decisively, it will increase the likelihood of the stock falling to ₹860. The region between ₹860 and ₹850 is a key medium-term support that is likely to limit the downside.

Tata Steel (₹708.9)

Tata Steel fell 2.4 per cent last week. Immediate outlook is not clear. Support is at ₹690 and resistance at ₹742. The stock can remain range-bound between ₹690 and ₹742 for some time. A breakout on either side of these levels will determine the next leg of move. A strong break below ₹690 can bring renewed pressure on the stock. Such a break will increase the likelihood of the stock falling to ₹630 or ₹620 on the back of profit booking. On the other hand, if the stock manages to sustain above ₹690, it will increase the possibility of breaking above ₹742. Such a break can take the stock higher to ₹785 or ₹800 in the coming weeks. Since the stock has been surging continuous for a prolonged period of time, a corrective fall from ₹785 or ₹800 cannot be ruled out. Investors can hold the long positions. Retain the stop-loss at ₹630 and revise it higher to ₹645 as soon as the stock moves up to ₹740. Accumulate longs at 650 if the stock declines below ₹690.



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