Technical Analysis

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

Yoganand D | Updated on December 06, 2014 Published on December 06, 2014

SBI (₹317.6)



Last week, the stock was volatile and moved in a narrow range without any clear short-term trend. But the medium-term trend continues to be up. This trend will remain in place as long as the stock trades above the significant support level of ₹250. The indicators in the daily chart hover in the bullish zone and lack strength. The daily volume has been decreasing over the past five trading sessions. Investors with a short as well as medium-term view can hold the stock with a stop-loss at ₹285. A strong rally above the immediate resistance at ₹322 can push it higher to ₹330 and ₹338 levels. If the stock holds above ₹250, it has the potential to hit ₹350. Important supports are at ₹300 and ₹290. An emphatic decline below ₹270 will diminish the short-term bullish momentum.



ITC (₹391.4)



ITC surged 7.8 per cent, breaking a significant long-term resistance at ₹380 levels, last week. The short and medium-term trends are up for the stock. It trades well above its 21- and 50-day moving averages. The indicators in the daily and weekly chart have entered the bullish zone, implying upward momentum. Traders with a short-term perspective can buy the stock with a stop-loss at ₹380. The stock can trend upwards to ₹400 and then to ₹410. Investors with a medium-term horizon can remain invested with a stop-loss at ₹350. A decisive fall below this level can drag the stock down to ₹340 and ₹330 levels. Immediate key supports to note are at ₹380 and ₹371 levels. A fall below ₹380 will alter the short-term bullish momentum and pull the stock down to ₹371 or ₹360 levels.



Infosys (₹2,069.7)



In line with our expectation, the stock reversed its trend and tumbled 5 per cent last week. The formation of a bearish engulfing candlestick pattern on the weekly chart also signals trend reversal. The stock’s short-term trend has come to a halt and a fall below ₹2,000 will reinforce bearish momentum and pull the stock down to ₹1,900 levels. Traders with a short-term horizon can consider selling the stock on rallies and accumulating short position on a fall below ₹2,000 with a stop-loss at ₹2,100 levels. The medium-term uptrend will stay intact as long as the stock trades above the support zone between ₹1,800 and ₹1,825 levels. Next key supports are pegged at ₹1,700 and ₹1,600 respectively. Conversely, a break above ₹2200 is needed for a rally to ₹2,300 levels.



RIL (₹957.7)



The stock of RIL slumped 3.3 per cent and breached the lower boundary of the sideways trading range between ₹970 and ₹1,000, last week. Moreover, it has closed well below its 200-day moving average, reinforcing bearishness. The daily relative strength index features in the neutral region with negative bias. Other indicators on the daily chart are on the brink of entering the negative territory. Traders with a short-term perspective can sell the stock with a stop-loss at ₹973 levels. The stock can decline to ₹940 and ₹920 levels. A fall below ₹920 can drag the stock down to ₹900 in the coming weeks. On the upside, the stock needs to conclusively break the key resistance at ₹1,000 for an up move to ₹1,020 levels. Investors with a medium-term perspective should remain on sidelines for now.



Tata Steel (₹460.8)



Last week, the stock fell 2.6 per cent after a volatile trade, and is now testing a significant support at ₹460. A conclusive fall below this support will have bearish implications and pull the stock down to ₹440 levels. Traders with a short-term view can sell the stock on such a fall with a stop-loss at ₹468 levels. The daily relative strength index feature in the neutral region with negative bias. The daily and weekly price rate of change indicators feature in the negative terrain implies selling interest. A strong breach of ₹440 will drag the stock down to ₹426, ₹410 and ₹400. Conversely, an emphatic rally above ₹500 is required to alter the bearish view and take the stock higher to ₹510 and ₹520. Immediate resistances are at ₹480 and ₹490 levels.







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