Technical Analysis

Pivotals – Reliance Industries (Rs 722.6)

Yoganand D | Updated on July 21, 2012 Published on July 21, 2012

The stock continues to move sideways in its short-term band between Rs 700 and Rs 742. Traders with a short-term perspective should be cautious as long as the stock hovers in this band. The daily as well as weekly relative strength indices are featuring in the neutral region implying neutral momentum. Only a strong fall below Rs 700 will be cue to initiate fresh short position with stop-loss at same level. In that scenario, the stock can roll down to Rs 670 and to Rs 650 in the ensuing weeks.

Conversely, breakout of the upper boundary at Rs 742 can take the stock higher to Rs 765 and to Rs 780. Next key medium-term resistances are at Rs 792 and Rs 830.

Infosys (Rs 2,217.6)

Infosys continued testing key support at Rs 2,200 last week. It is likely to move sideways in the range between Rs 2,200 and Rs 2,300 in the week ahead. Traders can consider initiating fresh short positions if the stock declines below Rs 2,200 with same stop-loss. The stock can decline to Rs 2,090 and to Rs 2,000 in the short-term. But a move above Rs 2,300 will push the stock higher to Rs 2,400 where the next key resistance is pegged. Subsequent important resistance is in the band between Rs 2,500 and Rs 2,540.

The stock continues to be in a medium-term downtrend from this March peak of Rs 2,990. This trend remains in place as long as the stock trades below Rs 2,600.

State Bank of India (Rs 2,134.5)

After testing resistance in the Rs 2,200 and Rs 2,230 range, the stock fell two per cent in the previous week. On Friday, the stock breached its 21-day day moving average downwards. Traders with a short-term perspective can initiate fresh short positions if the stock declines below Rs 2,100 with stop-loss at the same level. Targets are Rs 2,025 and Rs 1,977. Medium-term supports below these levels are positioned at Rs 1,900 and Rs 1,800.

Conversely, a strong move above Rs 2,230 can bring back bullish momentum and take the stock higher to Rs 2,326 and then to Rs 2,494 in the medium-term.

Tata Steel (Rs 415.8)

The stock fell 2.3 per cent over the last week, breaching its key support at Rs 420 as well as its 200-day moving average. Near-term trend is down for the stock. Traders with a short-term perspective can initiate fresh short positions with stop-loss at Rs 425. Targets are Rs 405 and Rs 395.

An emphatic fall below Rs 395 will strengthen bearish momentum and drag the stock downwards to Rs 378 or Rs 372 in the forthcoming weeks.

Significant resistances are at Rs 430, Rs 440 and Rs 455. Decisive weekly close above Rs 470 is needed to determine the bullishness and take the stock upwards to Rs 500 in the medium-term.

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