Technical Analysis

High Five

Yoganand D | Updated on November 16, 2014 Published on November 16, 2014

SBI (₹2,788.4)

Last week, the stock of SBI advanced 1.7 per cent amidst volatility. It managed to close above the key resistance at ₹2,750 levels. A positive start in the coming week can push the stock higher to the target of ₹2,850 and then to ₹2,960. The trend is up for both short- and medium-term. We reiterate that investors with short- and medium-term perspective can remain invested and initiate fresh long positions, with a stop-loss at ₹2,550. The stock hovers well above its 21- and 50-day moving averages. The ongoing short-term uptrend is backed with good volumes. The indicators on the daily and weekly chart feature in the bullish zone backing the uptrend. A corrective fall can find support at ₹2,700, ₹2,600 and then at ₹2,500.

ITC (₹368.2)

The stock surged 3.5 per cent last week and breached a key resistance at ₹365. This up move has altered the stock’s short-term downtrend. The short-term trend has turned bullish. The indicators on the daily as well as weekly chart are trending up, strengthening the ongoing up move. Traders with a short-term horizon can buy the stock with a stop-loss at ₹358 levels. Investors with a medium-term perspective can buy with a stop-loss at ₹345. A fall below this level will mar the bullish outlook. Currently, the stock is testing resistance at ₹370. An emphatic breakthrough of this level will take the stock northwards to ₹380 and then to ₹387. The stock can find support on declines at ₹360, ₹350 and in the band between ₹340 and ₹345.

Infosys (₹4,188.3)

The stock of Infosys is testing a significant resistance at ₹4,200. The stock has been on a medium-term uptrend, forming higher peaks and troughs, after taking support at ₹2,900. However, the stock’s indicators in the daily chart are showing signs of initial weakness which can confine its movement in the band between ₹4,000 and ₹4,200. Traders with a short-term perspective should tread with caution in the coming week. The stop-loss can remain at ₹3,990 levels. A decisive break-out of ₹4,200 can take the stock northwards to ₹4,400 in the short- to medium-term. Important supports below ₹4,000 are at ₹3,800 and ₹3,700. Investors with a medium-term horizon can stay invested with a stop-loss at ₹3,480.

RIL (₹969.1)

Last week, the stock of RIL fell 1.5 per cent. This fall can be considered as a corrective decline following the stock’s sharp rally in the last two weeks. The stock can find support at the ₹950-960 zone. Traders with a short-term view can hold their long positions and accumulate with a stop-loss at ₹950 levels. An upward reversal from the support zone can push the stock higher to ₹1,000 and then to ₹1,020. But to change the medium-term downtrend which is still in place, the stock has to conclusively move above ₹1,040 levels. Next targets are ₹1,070 or ₹1,100. On the other hand, a fall below ₹950 can pull the stock down to ₹920. Subsequent supports are pegged at ₹900 and ₹870 levels.

Tata Steel (₹479.1)

The Tata Steel stock advanced 1.5 per cent after reversing higher from the immediate support around ₹460 in the previous week. The ensuing week continues to be crucial as it still trades between a key support and resistance in the ₹440-₹500 range. Only a conclusive move out of these levels will decide the stock’s next short-term trend. Therefore, traders can avoid trading in the stock. Investors with a medium-term perspective can hold the stock and buy at declines to ₹460 levels, with a stop-loss at ₹440. Key support below ₹460 is at ₹440. A fall below ₹440 will be a cue for exiting. Next levels are at ₹426, ₹410 and ₹400. Nevertheless, a strong move above ₹500 can push it higher to ₹510 or ₹520.

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