Technical Analysis

High Five stocks: SBI, ITC, Infosys, RIL and Tata Steel

Yoganand D | Updated on November 22, 2014 Published on November 02, 2014

SBI (₹2,701.6)

Last week, SBI gained 4.6 per cent accompanied by good volumes. It decisively broke out of its sideways consolidation band between ₹2,350 and ₹2,600. Investors with short- and medium-term perspective can consider holding their long positions and initiating fresh long positions, with a stop-loss at ₹2,550. The stock trades above its 21- and 50-day moving averages. The relative strength index in the daily chart features in the bullish zone. The weekly RSI has just entered this zone from the neutral region, backing the uptrend. Targets are ₹2,750 and ₹2,850 in the medium term. Next resistance is at ₹2,960. The stock can face some difficulty around the resistance at ₹2,750 and saw a corrective decline. This fall will find support at ₹2,640 and ₹2,600. Subsequent key supports are at ₹2,500 and ₹2,350 levels.

ITC (₹355.2)

The stock was volatile and advanced over one per cent last week. This volatility is likely to extend in the coming truncated week too. Therefore, traders with a short-term perspective should tread with caution. Since the September peak of ₹379, the stock has been on a short-term downtrend. As long as the stock trades below the ₹365 levels, its downtrend will remain in place. On the other hand, the stock’s support at ₹344 is providing base as it falls. In the near term, the stock can extend its sideways consolidation in the range between ₹344 and ₹365. The failure to breach the level of ₹365 can pull the stock down to ₹344 and then to ₹340 in the forthcoming week. The next support below ₹340 is at ₹330. Key resistances beyond ₹365 are pegged at the levels of ₹370 and ₹380, respectively.

Infosys (₹4051.4)

The stock of Infosys zoomed 6.5 per cent, breaching its key resistance band between ₹3,950 and ₹4,000 last week. Since taking support around ₹2,900 in May 2014, the stock has been on a medium-term uptrend. Medium- as well as short-term trends are up for the stock. The stock hovers well above its 21- and 50-day moving averages. The indicators in the daily and weekly charts feature in the bullish zone. Traders with a short-term perspective can buy the stock with a stop-loss at the ₹3,990 levels. The stock can continue its upward journey to ₹4,200 levels or higher in the short term. Key immediate supports are at ₹3,800 and ₹3,700 levels. As long as the stock trades above ₹3,500, the medium-term uptrend will remain in place. Investors with a medium-term horizon can hold the stock with a stop-loss at ₹3,480 levels.

RIL (₹999.2)

After finding it difficult to breach its key resistance at ₹960, the stock conclusively broke this level in the latter part of the week. It has gained 4.8 per cent with good volumes. The short-term trend is turning bullish for the stock. The indicators in the daily chart have entered the bullish zone, backing the short term trend. Traders can consider buying the stock with a stop-loss at ₹975 levels. A strong rally above ₹1,000 can take the stock higher to ₹1,040 levels. To alter its medium-term downtrend, an emphatic rally beyond ₹1,040 is needed. In such a scenario, the stock can trend northwards to ₹1,070 or ₹1,100 in the coming months. Significant supports are at ₹960 and ₹920 levels. On the downside, the stock has to close well below its long-term support of ₹920 to reinforce bearish momentum and pull the stock down to ₹900 or ₹870.

Tata Steel (₹489.3)

Last week, the stock of Tata Steel surged more than 6 per cent after taking support in the zone between ₹440 and ₹450. With this rally, the stock has conclusively breached its key immediate resistance at ₹480 levels. Moreover, there has been an increase in volumes over the past three trading sessions, backing the uptrend. This gives short-term traders an opportunity to buy the stock with a stop-loss at ₹475 levels. It can find resistance at ₹500 initially. But a decisive breakthrough of this level would take the stock higher to ₹510 or ₹520. Investors with a medium-term perspective can consider buying the stock with a stop-loss at ₹440 levels. Key supports to note are pegged at ₹460 and then at ₹440 levels. A fall below ₹440 can drag the stock down to ₹426, ₹410 and to ₹400.

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