Technical Analysis

High Five Stocks: SBI, Tata Steel, Infosys, ITC, RIL

Yoganand D | Updated on November 22, 2014 Published on November 09, 2014

SBI (₹2,742.3)

The SBI stock extended its gain for the fifth consecutive week, advancing by 1.5 per cent in the truncated week. The stock has now touched our initial target of ₹2,750 and is testing this resistance level. A strong move above this level will take it higher to the next target of ₹2,850 in the coming week. We reiterate our advice that investors with short- and medium-term perspectives should stay invested and initiate fresh long positions, with a stop-loss at ₹2,550. Both short- as well as medium-term trends are up for the stock. The indicators on the daily chart are showing bullishness. A decisive move above ₹2,850 can push it higher to ₹2,960 in the medium term. A corrective fall can find support at ₹2,640 and ₹2,600. Next supports are at ₹2,500 and ₹2,350.

ITC (₹355.6)

The movement in ITC remained volatile and the stock ended on a flat note in the previous week. This volatility is likely to continue in the coming week too. Hence, traders with a short-term perspective should tread with caution. The stock has been on a short-term downtrend from the September peak of ₹379. This downtrend will remain in place as long as the stock trades below the ₹365 levels. However, the key support at ₹344 is cushioning the stock’s fall. The stock, hence, continues to trade in a sideways consolidation range of ₹344 and ₹365. Inability of the stock to rally above ₹365 can drag it down to ₹344 and then to ₹340 in the ensuing week. Key support below ₹340 is placed at ₹330 levels. Significant resistances above ₹365 are at ₹370 and ₹380.

Infosys (₹4168.7)

Infosys surged 3 per cent extending its short- as well as medium-term uptrend last week. It registered a new high at ₹4,183.4. The stock has been on a medium-term uptrend from the key support level of ₹2,900. The short-term trend is also up. The stock trades way above its 21- and 50-day moving averages. The current ongoing rally is backed by good volumes. Both the daily and weekly indicators feature in the bullish zone. Traders with a short-term horizon can hold the stock with a stop-loss at ₹3,990 . The stock can pause at ₹4,200. A further rally above this level can push the stock higher to ₹4,400 levels in the short- to medium term. Key supports to note are at ₹4,000, ₹3,800 and ₹3,700 respevtively. Investors with a medium-term outlook can stay invested with a stop-loss at ₹3,480 levels.

RIL (₹980.9)

The RIL stock retreated 1.8 per cent in the previous week, after testing its key resistance at ₹1,000. This is just a corrective fall within the recent uptrend. A further decline can find support at ₹960, which is a key support level and 200-day moving average. Traders with a short-term perspective can hold their long positions with a revised stop-loss at ₹955 levels. Resumption of the uptrend can take it higher to ₹1,000 and then to ₹1,020. Nevertheless, to alter the medium-term downtrend that is in place, the stock needs to decisively rally above ₹1,040 levels. The stock can then trend higher to ₹1,070 or ₹1,100 in the upcoming months. Significant support below ₹960 is at ₹920. A fall below ₹920 will reinforce the downtrend and take the stock lower to ₹900 or ₹870 .

Tata Steel (₹472.1)

Last week, the stock failed to breach its key resistance at ₹500. Instead, it did a volte-face from ₹395 and fell 3.5 per cent. The week ahead is crucial for Tata Steel as it trades between a key support and resistance zone in the ₹440-₹500 range. An emphatic move out of these levels is needed to decide the stock’s next short-term trend. Traders with a short-term perspective can desist trading in the stock for now. Investors with a medium-term perspective can hold it with a stop-loss at ₹440 levels. Immediate supports are at ₹460 and ₹440. However, a fall below ₹440 will be a cue to exit the stock. It can trend lower to ₹426, ₹410 and ₹400. Conversely, a conclusive breakthrough of ₹500 can push it higher to ₹510 or ₹520.

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