Technical Analysis


Yoganand D | Updated on November 30, 2014 Published on November 30, 2014

SBI (₹321.4)

The stock of SBI extended its rally further, surging 5.4 per cent last week. The stock is in a strong medium as well as short-term uptrend. It trades well above its 50 and 200-day moving averages. The indicators such as relative strength index and moving averages convergence-divergence feature in the bullish zone, confirming the strength of the current uptrend. Investors with short and medium-term horizon can remain invested and buy the stock with a revised stop-loss at ₹285. The short-term targets are ₹330 and ₹338. As long as the stock trades above ₹250, its medium-term uptrend will remain intact. It has the potential to touch ₹350 levels in the medium term. Key supports are at ₹308, ₹300 and ₹290. The short-term trend will get mitigated on a fall below ₹270.

ITC (₹363)

Last week, the stock fell 7.5 per cent to record an intra-week low before bouncing back, and closed 3.5 per cent lower for the week. The stock failed to breach its key long-term resistance at ₹380 last week, and is moving within a wide range between the levels of ₹350 and ₹380. The indicators in the daily and weekly chart are in the neutral region, giving mixed signals. Therefore, traders with a short-term perspective should tread with caution. A fall below ₹350 will pull it down to ₹345 and then to ₹340 in the short term. On the upside, a conclusive rally above ₹380 will have bullish implications and take the stock higher to ₹387 and ₹395 levels in medium term. Immediate resistances are at ₹372 and ₹380 levels. Supports are at the levels of ₹355 and ₹350.

Infosys (₹4,359.2)

The stock of Infosys conclusively broke through its key resistance at ₹4,200, surging 5 per cent with good volumes last week. However, the stock’s short-term trend could weaken in the coming weeks as the indicators such as relative strength index and price rate of change on the daily chart are displaying negative divergence. This could eventually lead to a trend reversal. Hence, traders should tread with caution in the ensuing weeks and consider booking partial profits at higher levels. A decline below the key support at ₹4,200 can pull the stock down to ₹4,100, ₹3,950 and then to ₹3,800 levels. The medium-term trend has been up since the May low of ₹2,894. Investors can hold the stock with a revised stop-loss at ₹3,650. The stock can trend higher to ₹4,500 levels.

RIL (₹990.8)

The key resistance at ₹1,000 held ground, and the stock closed marginally lower for the week. On the downside, the stock finds support at ₹970 where its 200-day moving average is placed. Over the past one month, the stock has been moving sideways in the band between ₹970 and ₹1,000. Traders with a short-term perspective should tread with caution as long as the stock trades within this range. A fall below ₹970 can drag the stock down to ₹940 or ₹920 levels. In such a scenario, traders can go short. But a breakout of the key resistance at ₹1,000 can push the stock higher to ₹1,020 levels. Investors with a medium-term time frame can then accumulate the stock with a stop-loss at ₹950. The medium-term targets are at the levels of ₹1,070 or ₹1,100.

Tata Steel (₹473.3)

Significant support as well as the stock’s 200-day moving average at ₹460 levels are buttressing the stock’s declines. Last week, it bounced back, gaining 2.3 per cent from this level. A decisive tumble below ₹460 will pull the stock down to ₹440. Nevertheless, the stock will continue to hover in a wide range of ₹440-500. For a clear medium-term trend to emerge, the stock needs to breakout of this sideways range. Key supports are placed at the levels of ₹460, ₹450 and ₹440. Strong breach of ₹440 will have bearish implications and pull the stock down to ₹426, ₹410 and ₹400 in the medium term. On the upside, a strong break of ₹500 will the turn the outlook bullish. Important resistances above ₹500 are at ₹510 and ₹520 respectively.

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