Up-move gains momentum in SBI (₹298.6)

SBI (298.6)

SBI surged over 4 per cent, breaking and closing decisively above the key resistance level of ₹287. The rally in the stock over the last couple of weeks has strengthened its upmove. The region between ₹285 and ₹287 will now act as a strong support. The outlook will turn negative only if the stock declines below ₹285. Such a fall can drag the SBI stock to ₹280 or even lower. But the bias is bullish on the chart. SBI is likely to sustain above ₹285 and move up to ₹310 initially and then to ₹322 over the short term. The region around ₹322 is a crucial resistance. Inability to breach this hurdle can trigger a pull-back move to ₹310 or ₹300. But a strong break above ₹322 will increase the likelihood of the stock targeting ₹350 or even ₹375 over the medium term. Traders with a medium-term perspective can go long at current levels and also accumulate on dips at ₹295, ₹292 and ₹289. Keep the stop-loss at ₹278 for the target of ₹345. Revise the stop-loss higher to ₹283 as soon as the stock moves up to the level of ₹310.

ITC (₹303.7)

ITC was stuck in a sideways range between ₹295 and ₹305 last week. Though the broader bullish outlook remains intact, the near-term view is mixed. Support is at ₹295 and resistance is at ₹308. A range-bound move between ₹295 and ₹308 is possible for some time. A breakout on either side of ₹295 or ₹308 will then decide the next move. A break below ₹295 can extend the down-move to ₹290 or ₹285. Further fall below ₹285 is unlikely, as fresh buying interest is likely to emerge in the ₹285-290 region. As such, an eventual break above ₹308 will take the stock higher to ₹318. Further break above ₹318 will increase the likelihood of the stock reaching ₹360 over the medium term. Investors can hold their long positions with a revised stop-loss at ₹240. Short-term traders who have taken long positions at ₹297 can hold it and accumulate on dips at ₹293 and ₹288 levels. Stop-loss can be placed at ₹281 for the target of ₹330. Revise the stop-loss higher to ₹303 as soon as the stock moves up to ₹310 level.

Infosys (₹1,364.1)

Infosys fell sharply by about 3 per cent initially, but managed to recover in the later part of the week. Resistance is at ₹1,390. A strong break above it is needed for the uptrend to resume. Such a break can take the stock higher to ₹1,435 initially. Further break above ₹1,435 will then pave the way for our long-term targets of ₹1,450 and ₹1,470. But as long as the stock remains below ₹1,390, a range-bound move between ₹1,335 and ₹1,390 can be seen for some time. The 21-day moving average at ₹1,339 and a trendline at ₹1,335 are the crucial short-term supports. These supports have been limiting the downside in the stock since April. The short-term view will turn negative only if Infosys declines below ₹1,335 decisively. In such a scenario, a corrective fall to ₹1,310 is possible. Further break below ₹1,310 can drag the stock lower to ₹1,290 or even lower on the back of profit booking over the short term. Both medium- and long-term investors who are holding long positions should look to book partial profits at ₹1,450.

RIL (₹1,176.7)

RIL surged, breaking above the key resistance level of ₹1,140, as expected last week. The stock rallied over 6 per cent intra-week to make a high of ₹1,202.95. However, it has come off from those levels, giving back some of the gains, and closed 4 per cent higher for the week. Near-term supports are at ₹1,145 and ₹1,138. The short-term view will turn negative only if RIL declines below ₹1,138 decisively. In such a scenario, a corrective fall to ₹1,100 is possible on the back of profit-booking. Further break below ₹1,100 will increase the likelihood of the corrective fall extending to ₹1,065 or even ₹1,050 thereafter. But such a fall below ₹1,100 looks unlikely, as fresh buyers are likely to emerge at lower levels. A strong break and a decisive close above ₹1,200 will boost the momentum. Such a break can take RIL higher to ₹1,250 and ₹1,300 thereafter. Short-term traders can go long on dips at ₹1,160 and ₹1,145. Stop-loss can be placed at ₹1,085 for the target of ₹1,300. Revise the stop-loss higher to ₹1,175 as soon as the stock moves up to ₹1,210.

Tata Steel (₹555.1)

Tata Steel was range-bound last week. The immediate outlook is mixed. Support is at ₹535 (100-week moving average) and resistance is at ₹575 (21-week moving average). The Tata Steel share can remain range-bound between ₹535 and ₹575 for some time. A breakout on either side of ₹535 or ₹575 will then decide the next move. A strong break above ₹575 will ease the downside pressure. Such a break will trigger a relief rally to ₹600 or even ₹620 on the back of short-covering. On the other hand, if Tata Steel breaks below ₹535, ₹500 and ₹490 levels can be revisited. Further break below ₹490 can take the stock to ₹475 and ₹470 thereafter. The region between ₹470 and ₹475 is a crucial long-term support and the price action around this region will need a close watch. Those with short positions at ₹525 and ₹540 can hold them. Retain the stop-loss at ₹570 for the target of ₹475. Revise the stop-loss lower to ₹510 as soon as the stock moves down to the level of ₹495.

Gurumurthy K

Read the rest of this article by Signing up for Portfolio.It's completely free!

What You'll Get





Related

MORE FROM BUSINESSLINE


 Getting recommendations just for you...
This article is closed for comments.
Please Email the Editor