Weekly trading guide

Supports to limit downside in SBI (₹304.4)

SBI surged over 9 per cent intra-week and made a high of ₹325.85. However, the stock reversed sharply lower on Friday, giving back most of the gains, and closed 2 per cent higher for the week. Immediate resistance is at ₹312. As long as the stock remains below this resistance, an intermediate dip to ₹295 or ₹290 cannot be ruled out. However, the bullish outlook will remain intact as the indicators on the chart continue to give positive signals. The 21-day moving average has crossed over the 200-day moving average. This is a bullish signal, indicating that the downside could be limited. Strong support is in the ₹290-₹285 region, a break below which looks less probable. A bounce-back from this support zone will have the potential to breach the key resistance at ₹322. Such a break will boost the momentum and increase the likelihood of the stock targeting ₹350, or even ₹370 thereafter. Medium-term traders who took long positions last week can accumulate on dips at ₹295,₹292 and ₹289. Revise the stop-loss higher to ₹283.

ITC is range-bound with bullish bias (₹304.7)

ITC was stuck in a narrow range between ₹299 and ₹307 in the past week. However, the overall bullish outlook remains intact. The price action on the daily chart signals a formation of an ascending triangle. This is a bullish continuation pattern, indicating that broader up-trend is likely to resume. Also, the 21-week moving average is on the verge of crossing over the 55-week moving average — a positive signal indicating that the downside could be limited. Key resistance is at ₹308. A strong break and a decisive close above this hurdle can take the stock higher to ₹318 and ₹320 over the short term. The region between ₹318 and ₹320 is a crucial long-term resistance. A decisive rise past ₹320 can target ₹360 over the medium term. Investors can hold the long positions and retain the stop-loss at ₹240. Short-term traders who have taken long positions at ₹297 can accumulate on dips at ₹293 and ₹288. Stop-loss can be placed at ₹281; move it higher to ₹303 as soon as ITC moves up to ₹310. Short-term traders can book profits at ₹330.

Key resistance ahead for Infosys(₹1,385.2)

Infosys continues to consolidate between ₹1,335 and ₹1,390. Within this range, the stock inched higher by 1.5 per cent last week. The view remains the same for the stock. The 21-day moving average at ₹1,356 and a trend line at ₹1,350 are the key supports. A strong break below ₹1,350 will only increase the likelihood of the stock declining below ₹1,335 and targeting ₹1,310 or ₹1,290 in the short term. The region between ₹1,300 and ₹1,290 is a crucial support. The short-term outlook will turn negative only if Infosys breaks below this support zone. Such a break can drag the stock lower to ₹1,250 on the back of profit-booking. On the other hand, resistance is at ₹1,390. A strong break above this hurdle is needed for the stock to gain fresh momentum. Such a break can take the stock higher to ₹1,435 initially. A further break above ₹1,435 will then increase the likelihood of the stock attaining our long-term target levels of ₹1,450 and ₹1,470. Both medium- and long-term investors who are holding long positions should look to book partial profits at ₹1,450.

RIL retains bullish momentum (₹1,204)

RIL retained its momentum and surged about 5 per cent intra-week to make a high of ₹1,231.5. However, it has come off from those levels, giving back some of the gains. Key near-term supports are at ₹1,200 and ₹1,180. The stock will come under pressure only if it breaks below ₹1,180. Such a break can take it to ₹1,150 . The outlook will turn negative only if RIL decisively declines below ₹1,150. In such a scenario, a corrective fall to ₹1,070 or ₹1,050 is possible on the back of profit-booking. On the other hand, as long as the stock remains above ₹1,180, the current up-move is likely to continue. Resistance is in between ₹1,220 and ₹1,230. A strong break above this resistance zone can initially take the stock higher to ₹1,250. A further break above ₹1,250 will then increase the likelihood of the stock targeting ₹1,300 thereafter. Short-term traders can make use of dips and go long at ₹1,190 and ₹1,165. Stop-loss can be placed at ₹1,125 for the target of ₹1,300. Revise the stop-loss higher to ₹1,210 as soon as the stock moves up to ₹1,245.

Up-move picks up for Tata Steel (₹575.5)

The up-move in Tata Steel is gaining momentum. The stock surged 5.7 per cent intra-week to make a high of ₹587. The short-position recommended couldn’t play out as the stock moved beyond the stop-loss level. The outlook remains positive. The strong rally last week has taken the stock well above the key ₹565-₹570 resistance region. Immediate support is at ₹565, which is likely to limit the downside in the near term. A bounce back from this support can take the stock higher to ₹590 or ₹600 in the coming days. Inability to breach ₹600 can trigger a pull-back move to ₹580 or ₹575. But a strong break above ₹600 will increase the likelihood of the up-move extending to ₹620 and ₹630. The region between ₹620 and ₹630 is a crucial resistance. Whether Tata Steel manages to breach this hurdle or not will decide the next move. A downward reversal from ₹630 will keep the down-trend that has been in place since January, intact. But a strong break above ₹630 will signal the end of the down-trend.

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

What You'll Get





This article is closed for comments.
Please Email the Editor