SBI’s stock continued its downtrend last week and fell 1 per cent. The stock is now testing its key support at ₹2,400 which is also the base line for a descending triangle pattern. The stock has been on a downtrend since its May 2014 peak at ₹2,833. It is hovering well below its 21- and 50-day moving averages. We reiterate our prior view that traders with a short-term perspective should initiate a fresh short position on a strong decline below ₹2,400, with a stop-loss at ₹2,420 levels. Targets are ₹2,300 and ₹2,250. Significant medium-term support for SBI is pegged at ₹2,150 levels. On the other hand, the stock has key resistances placed at ₹2,500 in the band between ₹2,580 and ₹2,600. Above ₹2,600, it can face resistance at ₹2,750 and ₹2,850. Investors with a medium-term perspective can exit and buy later.
ITC (₹348.4)
ITC hovered around current levels in the previous week. The stock formed a bullish engulfing candlestick pattern at a key support level on Friday, signalling a pause in its correction. It is trading well above its 50- and 200-day moving averages. Investors with both a short- as well as medium-term horizon can consider buying the stock at declines with a stop-loss at ₹335. The stock is testing support at ₹345; a further fall is also likely to find support at ₹340 levels. An upward reversal from either support level can push it up to ₹365 in the near term. The stock needs to breach the key hurdle at ₹365 to strengthen its uptrend and take it to ₹375 and then to ₹385. However, an emphatic fall below the key support of ₹330 will mar the uptrend and pull it down to ₹315 in the short term.
Infosys (₹3,480.3)
Infosys jumped 4 per cent last week, emphatically breaching its key resistance and 200-day moving average at ₹3,350. This up move has reinforced the stock’s bullish momentum. The stock has extended its short-term uptrend that has been in place since a May 2014 low of ₹2,894. Traders with a short-term perspective can make use of dips to buy the stock while maintaining a stop-loss at ₹3,430. The stock can trend northwards and reach the price target of ₹3,600 and then ₹3,650 levels in the short term. Investors with a medium-term perspective can accumulate the stock with a revised stop-loss at the level of ₹3,150. Key supports are pegged at ₹3,350 and then in the zone between ₹3,200 and ₹3,250. A strong rally beyond ₹3,650 can take the stock higher to ₹3,800 in the medium term.
Tata Steel (₹537.5)
Tata Steel plunged 2 per cent last week, reversing from its significant resistance band between ₹570 and ₹580. This stock has breached its key immediate support level of ₹545, which is also its 21-day moving average. The relative strength index on the daily chart is trending down within the neutral. The weekly RSI is displaying a negative divergence, signalling a possibility of the stock’s trend reversal emerging now. Traders with a short-term perspective can initiate fresh short position with a stop-loss at ₹552. Targets are ₹520 and ₹510. The next important support is seen at ₹500. Investors with a medium-term horizon can take profits off the table at this juncture. On the upside, a decisive rally above ₹580 will take the stock higher to ₹600 and then to ₹630.
RIL (₹980.4)
RIL was volatile and ended the week on a flat note with a negative bias. Since May 2014 peak of ₹1,142, the stock has been on a short-term downtrend. While trending down, the stock conclusively breached its psychological support level of ₹1,000 and is now hovering well below it. The indicators on the daily chart continue to feature in the negative zone, backing the downtrend. We reaffirm that traders with a short-term perspective can sell the stock on rallies with a stop-loss at ₹1,000. It can fall to ₹950 and then to ₹930, where its 200-day moving average is poised. Next key supports are pegged at ₹920 and ₹900. On the upside a decisive rally above the key resistance band between ₹1,050 and ₹1,060 is needed to alter its downtrend and take the stock higher to ₹1,100 or ₹1,142.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.