SBI (₹2,414.3)

Emphatically breaking through a significant resistance at ₹2200, SBI skyrocketed 11 per cent last week. This rally has achieved our medium term price targets. With the stock’s acceleration over the past two weeks, its daily indicators are featuring in the over-bought territory implying a near-term correction on the cards. Moreover, the stock is testing its key long-term resistance at ₹2500; a breach immediately is not an easy task. Therefore, traders can consider taking profits off the table at the current juncture and be on the sidelines in the ensuing week. Though the medium and short-term trends are up, a near-term correction can’t be ruled out at this point.

The stock is hovering well above its 50- and 200-day moving averages. A near-term corrective decline can pull the stock down to ₹2300 or to ₹2200 in the coming weeks. Subsequent important support is at ₹2050 and ₹2100 zone. Investors with a medium term perspective can continue holding the stock with a revised stop-loss at ₹2040. Strong rally above ₹2500 can take the stock to ₹2600.

ITC (₹357.5)

ITC gave away most of its intra-week gains on Friday, though it did finish the week on a positive note. The stock’s short-term uptrend appears to have come to an end as the stock fell almost three per cent on Friday, reversing down from a key resistance level. However, it is now testing its immediate support at ₹354 levels. A fall below this level will be the cue for traders with short-term perspective to initiate fresh short positions with same level as stop-loss. The short term targets are ₹345 and ₹340. Key resistances to note are at ₹365 and ₹375. Investors with a medium term perspective can consider taking profits off the table and re-entering at lower levels. A decisive fall below ₹340 will mar the medium-term uptrend and drag the stock down to ₹325 and then eventually it can decline to ₹310 in the medium-term.

Infosys (₹3,177.8)

Infosys was very volatile last week and managed to close with 2 per cent gains. The stock's key immediate resistance and 200-day moving average hovering at ₹3350 arrested its near-tem up move last week. Medium-term trend has been down for the stock since encountering resistance at ₹3850 this March. The stock is hovering well below its 50- and 200-day moving averages. The indicators in the daily and weekly charts are hovering in the neutral region with negative bias. Having said that, it is trading above a key support level at ₹3000-3050 band. Only a conclusive fall below this base will reinforce the bearish momentum and pull the stock down to ₹2900 and then to ₹2800 in the ensuing weeks. Traders with a short-term horizon should tread with caution as long as the aforementioned support band holds. Important resistances are pegged at ₹3350 and ₹3450 levels. Next key resistance beyond ₹3450 is at ₹3550 level.

Reliance Industries (₹1080.5)

After rising as much as 14.5 per cent, the RIL stock gave away some of its gains to end the week with 8 per cent increase. Medium as well as short-term trends are up for RIL. The stock is hovering well above its 50- and 200-day moving averages. Recent up-move is overdone and is facing resistance at ₹1150 levels. On Friday, the stock was choppy and formed a doji candlestick pattern implying indecisiveness. Further, the stock’s daily and weekly indicators are featuring in the overbought levels implying a near-term correction on the cards. Therefore, only a fall below ₹1050 will be cue that the stock is heading for a near-term corrective decline. In that scenario, the stock can extend its decline to ₹1000 levels before resuming its uptrend. Traders should trade with caution in the ensuing week. Conversely, an up-move above ₹1150 will push the stock northwards to ₹1200 in the medium-term. Investors with medium-term perspective can consider holding their long position with a revised stop-loss at ₹925 levels.

Tata Steel (₹440.4)

On Friday, the stock tumbled 4.4 per cent accompanied by extraordinary volumes forming a bearish engulfing candlestick pattern. This fall has evaporated most of the previous weeks’ gains. However, the stock finished the week up by 5.6 per cent. The stock is reversing down from a key resistance at ₹460. Also, the indicators in the daily chart are losing bullish momentum. A strong fall below the stock’s immediate base at ₹430 will be indication for traders with short term perspective to initiate fresh short position with same level as stop-loss. The stock can decline to ₹410 and ₹390 in the coming sessions. Further decline below ₹390 will mar the stock’s short-term uptrend and drag it down to ₹370 levels. On the upside, a decisive rally above ₹460 will regain bullish momentum and take the stock higher to ₹470 or ₹484 levels in the medium-term.

Snapshot

1 SBI encounters a key resistance at ₹2500 and is poised below it.

2 ITC is on the cusp of a trend reversal.

3 Infosys continues to trade above a key support level.

4 RIL is hovering at overbought levels, correction due.

5 Tata Steel forms a bearish engulfing pattern.

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