SBI (₹2,515.4)
The stock of SBI advanced 2.3 per cent amidst volatility last week. Over the past two weeks, the stock has been trading in a very narrow range — not setting any clear direction. Short-term traders can wait on the sidelines till a clear direction emerges. A decisive rally above the immediate resistance band between ₹2,580 and ₹2,600 will alter the stock’s short-term downtrend. In such a scenario, traders can consider initiating fresh long positions. The stock can trend northwards to the level of ₹2,750 and then to ₹2,850 in the forthcoming weeks. On the other hand, a fall below ₹2,450 and then to ₹2,400 will reinforce bearish momentum and pull the stock down to ₹2,350, ₹2,300 or ₹2,250 in the medium term. Hence, traders should tread with caution in the coming week. This applies to investors with a medium-term horizon as well.
ITC (₹350.3)
The movement in the ITC stock was choppy and it failed to surpass ₹355 — its immediate resistance — last week. It has formed a bearish engulfing candlestick pattern, implying near-term trend reversal. Both the daily as well as weekly indicators are featuring in the neutral region with negative bias. Therefore, traders with a short- to medium-term horizon can consider taking profits off the table and initiating fresh short position with a stop-loss at ₹356 levels. Short-term targets are ₹345 and ₹340. A decisive fall below ₹340 will threaten the stock’s short-term uptrend and drag it down to ₹335 and ₹330 levels in the coming weeks. Conversely, an emphatic breakthrough of the immediate key resistance at ₹355 can take the stock higher to ₹365. But, only a breach of ₹365 will pave way for an upward move to ₹375 and ₹386 in the medium term.
Infosys (₹3,730)
Last week, Infosys surged 3.8 per cent, breaching its key resistance at ₹3650 levels. However, the stock is witnessing selling pressure, trading close to its medium-term price target of ₹3800. It faces medium-term resistance in the band between ₹3800 and ₹3850. Further, the stock has formed a shooting star candlestick pattern which implies selling pressure and trend reversal. The negative divergences displayed on the daily indicators are still intact. Hence, investors with a medium-term perspective can consider booking profits at this juncture, before the stock starts to trend lower. A fall below the immediate support at ₹3650 can pull the stock down to ₹3,550 and then to ₹3450 levels. However, to confirm the downward reversal, the stock needs to conclusively close below ₹3,450 levels. Key resistances above ₹3,850 are at ₹3,900 and ₹4,000 levels for the stock.
RIL (₹1,025.2)
The stock of Reliance Industries advanced 2.6 per cent in the previous week. Nevertheless, the stock has key resistance in the zone between ₹1,050 and ₹1,060. As long as this resistance band holds, the stock’s short-term downtrend will remain intact. Hence, traders should tread with caution till the stock breaches ₹1,060 levels. The indicators on the daily chart are about to enter the positive territory, implying buying interest. A decisive rally above the level of ₹1,060 is needed to alter the downtrend and take the stock higher to the levels of ₹1,100 and ₹1,142. The inability to surpass the key resistance will keep it moving sideways in a broad range between ₹960 and ₹1,060. Immediate supports are at the levels of ₹1,000 and ₹960. A fall below ₹960 will trigger the subsequent supports at ₹920 and ₹900, cushioning the stock’s decline.
Tata Steel (₹513)
The stock of Tata Steel formed a spinning top candlestick pattern on the weekly chart, implying indecisiveness. Since early June, the stock has been on a sideways movement in the ₹500-580 band with negative bias. Within this broad trading range, the stock has been on an intermediate-term downtrend since the late July peak of ₹573 levels. The stock is trading well below its 21- and 50-day moving averages. The indicators on the daily chart are trending down, backing the stock’s downtrend. Traders can make use of rallies to initiate fresh short position with a stop-loss at ₹530. Targets are ₹500 and ₹493. Strong fall below ₹500 will strengthen the downtrend and drag the stock down to ₹476 and ₹450 in the medium term. Immediate resistances are at ₹530 and ₹550 and in the band between ₹570 and ₹580.
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