The stock was choppy last week and it still continues to test the key resistance level at Rs 2,700. Strong close above this resistance is needed before fresh long positions can be initiated. Targets on a strong move above Rs 2,700 will be Rs 2,850 and Rs 2,900. However, we reiterate that decline below its immediate support at Rs 2,600 will drag the stock lower to Rs 2,500 or to Rs 2,450 in the short-term.

The stock still remains in a medium-term downtrend. Only a conclusive jump above Rs 3,000 will alter the downtrend and lift the stock higher to Rs 3,250 and to Rs 3,500 in the medium-term.

Reliance Industries (Rs 755.4)

RIL retreated 6.8 per cent resuming its short-term downtrend in the last week. It is trading well below its 21- and 50-day moving averages. The daily relative strength index has entered in to the bearish zone from the neutral region and the weekly RSI is on the brink of entering into this zone. The stock is poised just above its significant medium-term support level of Rs 750. A rebound from this support level will take the stock higher to Rs 783, Rs 800 and then to Rs 820. Strong move above Rs 825 is needed to reverse the downtrend and lift the stock further higher to Rs 842 and Rs 860. Traders should tread with caution and initiate fresh short position only if the stock drops below Rs 750 decisively. The stock can then slide to Rs 730 and then to Rs 700 in the upcoming weeks.

Medium-term trend is down for the stock. However, the presence of long-term support between Rs 700 and Rs 750 can provide base in the medium-term. But a conclusive breach of this support will pull the stock down to Rs 670.

State Bank of India (Rs 1,863.9)

After moving higher to an intra-week high of Rs 1,951, the stock lost its bullish momentum. Later it dropped steeply to finish the week Rs 22.5 lower, forming a spinning top candlestick in the weekly chart, indicating indecisiveness. However, short-term traders can prolong their long holdings with stop-loss at Rs 1,800. Targets ahead are at Rs 1,950 and Rs 2,025. On the other hand, a fall below Rs 1,800 will mar the positive bias and drag the stock down to Rs 1,710 and to Rs 1,670 in the short-term.

 

SBI continues to be in a medium-term downtrend. Downward penetration of Rs 1,700 will strengthen the downtrend and roll the stock down to Rs 1,629 and Rs 1,510. An up move above Rs 2,500 will modify the trend.

Tata Steel (Rs 398.2)

After reversing lower from the resistance around Rs 420, Tata Steel plummeted 5 per cent in the previous week. The stock is once more testing its important support band between Rs 390 and Rs 400. This support band can arrest the stock's decline and provide strength in the week ahead. However, traders should trade with caution in the stock. Fresh long position is recommended only if the stock climbs beyond Rs 420. Subsequent targets are Rs 450 and Rs 463.

Breakthough of the aforesaid support band will pull the stock down to Rs 374 in the short-term. Medium-term trend is down for the stock. Key support below Rs 374 is at Rs 350.

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