Weekly Trading Guide

SBI (₹288.85)

SBI tumbled 2 per cent on Friday and gave back most of the gains made during the week. Cluster of supports are poised between ₹285 and ₹283. Though a dip to test this support zone is possible in the initial part of the week, a fall below ₹283 is less probable. An eventual reversal from the ₹285-₹283 support zone can take the stock higher to ₹295 and ₹298. Resistance is between ₹299 and ₹300. Inability to break above ₹300 may pull the stock down to ₹290 and ₹285. But a strong break above ₹300 will pave way for the next targets of ₹305 and ₹312. Short-term traders with high risk appetite can go long on dips to ₹285. Stop-loss can be placed at ₹279 for the target of ₹297. Revise the stop-loss higher to ₹287 as soon as the stock moves up to ₹290. Investors holding long positions can retain the stop-loss at ₹270. Book partial profits at ₹325 and move the stop-loss higher to ₹280 on the rest. SBI will come under pressure only if it breaks below the key short-term support level of ₹281. Such a break will increase the likelihood of the stock falling to ₹270.

ITC (₹310.8)

ITC failed to gain strength after opening the week with a gap-up and was stuck in a sideways range. The daily chart reveals a mixed picture. But the bias on the weekly chart is bullish, indicating a rise to test the ₹318-₹320 resistance zone in the coming days. A strong break above ₹320 can boost the momentum. Such a break will increase the possibility of the stock rallying to ₹335 and ₹340 levels. Investors can hold the long positions with a stop-loss at ₹290. Revise the stop-loss higher to ₹310 as soon as the stock moves up to ₹325. Book profits at ₹330. On the other hand, if the stock declines below the immediate support at ₹307, it can fall to ₹302 or ₹300. The region around ₹300 is a strong support and a break below it is unlikely at the moment. However, if ITC breaks below ₹300 decisively, it can extend its fall to ₹294 or ₹292 levels. Short-term traders holding long positions can retain the stop-loss at ₹293 and consider accumulating on dips at ₹302. Revise the stop-loss higher to ₹308 as soon as the stock moves up to ₹315 and exit the trade at ₹320.

Infosys (₹943.3)

Infosys spiked to ₹968 on Thursday but reversed lower giving back most of the gains. Support is at ₹930 and resistance at ₹975. A range-bound move between ₹930 and ₹975 is possible for some time. If the stock breaks this range above ₹975, the downside pressure will ease and a rise to ₹1,000 is possible. Further break above ₹1,000 will increase the likelihood of the stock extending its rally to ₹1,030 and ₹1,045. On the other hand, if Infosys declines below ₹930 in the coming days, it can fall to ₹910 or ₹900. Whether the stock reverses higher from ₹900 or not will determine the next move. An upward reversal from ₹900 can take the stock higher to ₹950 and ₹970 levels once again. But a decisive break below ₹900 can take it lower to ₹875 initially. Further break below ₹875 can drag it to ₹850 or ₹830. As has been reiterated in this column, the region between ₹830 and ₹800 is a significant long-term support zone. A fall to this level will be a good opportunity for long-term investors to accumulate long positions. Investors can hold their long positions.

RIL (₹1,435)

RIL surged breaking above the psychological ₹1,400 mark as expected and confirms the end of the corrective fall that was in place since the last week of April. Immediate resistance is at ₹1,450. Inability to surpass it can drag it to ₹1,400 or ₹1,375. But the 21-day moving average is on the verge of crossing over the 55-day moving average. This indicates that the overall bullish outlook is intact. So, the downside is expected to be limited as fresh and strong buying interest may emerge on every dip the stock sees. It also leaves the possibility high for the stock to break above ₹1,450 in the coming days. Such a break can take RIL higher to ₹1,485. A pull-back move from ₹1,485, if seen, may find support around ₹1,450. Further break above ₹1,485 will increase the likelihood of the stock climbing above ₹1,500 going forward. It will also keep the medium-term bullish outlook intact for a revisit of ₹1,600 and ₹1,650. Investors can hold the long positions. Revise the stop-loss higher to ₹1,260. Move the stop-loss further higher to ₹1,280 as soon as RIL moves up to ₹1,285.

Tata Steel (₹507.4)

Tata Steel failed to sustain higher after surging to an intra-week high of ₹525. The stock reversed sharply lower from this high and closed just 1 per cent higher for the week. Immediate support is at ₹503 and cluster of supports is around ₹500. A break below ₹500 can take the stock lower to ₹495 or ₹490 initially. Further fall below ₹490, if seen, can target ₹483 on the downside. But if Tata Steel manages to sustain above ₹500, a bounce back to ₹520 and ₹525 is possible once again. Further break above ₹525 will see the rally extending to ₹530 and ₹535 thereafter. As being reiterated in this column, the region around ₹535 is a crucial long-term resistance, keeping the possibility open for the stock to test the crucial resistance region around ₹535. The price action after testing this key resistance will need a close watch to get a cue on the next possible move. Investors can hold the long positions. Revise the stop-loss higher to ₹455. Book partial profits on your holdings at ₹535 and move the stop-loss higher for the rest to ₹480 thereafter.

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