Technical Analysis

Pivotals: Reliance Industries (793.3)

Lokeshwarri S.K. | Updated on November 15, 2017 Published on January 21, 2012

RIL announced its earnings and terms of buyback after trading hours on Friday. Market's reaction to these will determine the short-term trajectory for the stock. It formed an upward gap on Wednesday following the buzz on the share buyback. This surge has helped the stock close above both the 21 as well as the 50 day moving averages.

Short-term supports are at Rs 765 and Rs 745. Traders can hold their long positions as long as it trades above the first support. Upper targets for the week are Rs 827 and Rs 845. The 200-day moving average at Rs 845 will make this level an important hurdle.

The medium-term trend in the stock is down. But investors can take heart from the fact that it is holding above the key long-term support zone between Rs 700 and Rs 750. Long-term view will turn negative only on a weekly close below the recent trough at Rs 687.

Infosys (Rs 2,583.5)

Infosys closed almost unchanged for the week with a bullish gravestone doji in the weekly candlestick chart. This is a positive since the stock is attempting to stabilise around 50 per cent retracement of the up-move from August 2011 trough. The medium-term trend continues to be up and this view will reverse only if the stock goes on to close below Rs 2,467. This can act as the stop-loss for investors. The short-term trend is, however, down and the stock could attempt to move to the recent low at Rs 2,552. Rebound from here will provide the opportunity to go long for traders. Upper targets will then be at Rs 2,636 and Rs 2,673.

State Bank of India (Rs 1,931.8)

SBI too put up a strong show, closing higher in all the sessions last week. The stock has, however, neared an important short-term resistance at Rs 1,950. Traders should watch out for reversal early next week that can pull it lower to Rs 1,811 and Rs 1,724. Stop-loss for the short-term trading can be at Rs 1,800. If the stock holds above this level, it can move on to Rs 2,017 or Rs 2,062 in the days ahead. Conversely, a decline below Rs 1,724 will pull the stock down to its recent trough at Rs 1,571.

The medium-term outlook for the stock continues to be down. It has to first move above Rs 2,050 and Rs 2,330 to make the medium-term view positive.

Tata Steel (Rs 436.6)

Tata Steel surpassed the obstacle at Rs 420 to achieve our second target. But the stock faces strong short-term resistance around Rs 450. It is possible that the stock can give up some ground early next week to decline to Rs 400. Short-term traders can buy into such declines with stop at Rs 400. Decline below this level will result in the decline prolonging to Rs 390 or Rs 375. If the stock continues powering ahead next week, upper targets are Rs 478 and Rs 491.

Medium-term trend in the stock is down but the fact that it is moving up from the critical support zone between Rs 330 and Rs 370 is a positive from a long-term view point. Weekly close above Rs 476 will reverse the negative outlook for this time-period.

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