Weekly Trading Guide

Supports may limit downside in SBI

SBI (300.3)

SBI seems to be lacking fresh buying momentum. The stock made a high of ₹308 and has come-off from there, giving back all the gains. Immediate support is at ₹298 . If SBI manages to bounce from this support, an up-move to ₹310 or ₹312 is likely. Further break above ₹312 will then increase the likelihood of the stock extending its up-move to ₹320. On the other hand, if SBI declines below ₹298, a fall to ₹290 or ₹285 is possible. Cluster of supports in the ₹290-285 region mitigates the risk of the stock declining below ₹285. But if SBI breaks below ₹285, it can test ₹280 or ₹278 thereafter. Broadly, the stock can remain range-bound between ₹285 and ₹310 in the short term, with a bullish bias. A break-out on either side of ₹285 or ₹310 will then decide the next move. Medium-term traders can hold the long positions with a stop-loss at ₹283. Revise the stop-loss higher to ₹301 as soon as the stock moves up to ₹318.

 

ITC fails to gain momentum

ITC (₹310.3)

ITC failed to retain the momentum and fell 1 per cent last week. Immediate support is at ₹307. A break below it can take the stock lower to ₹303. Further break below ₹303 will then target ₹297. But if ITC manages to sustain above ₹307 in the coming days, an up-move to ₹319 is possible. Inability to breach ₹319 can pull it lower to ₹310 and ₹307 again. In such a scenario, a range-bound move between ₹307 and ₹319 is possible for some time. But if ITC manages to surpass ₹319 decisively, it can target ₹327 — the next crucial hurdle. The stock will gain fresh momentum if it breaches ₹327 decisively. Such a break can pave way for the next target of ₹360 over the medium term. Investors can hold the long positions with a revised stop-loss at ₹265. Short-term traders who have taken long positions at ₹297 can hold it and retain the stop-loss at ₹303 for the target of ₹330. Revise the stop-loss higher to ₹308 as soon as the stock moves up to ₹321.

 

Infosys hovers above a crucial support

Infosys (₹1,379.9)

Infosys tumbled 3.6 per cent last week. The company’s CFO resigning triggered a sharp fall in the stock. A crucial support is poised near tcurrent levels in the ₹1,375-1,370 range. The price action in the coming days will need a close watch as it would be key in deciding the next move for the stock. If Infosys manages to sustain above this support zone, an up-move to ₹1,400 or ₹1,405 is possible. A strong break above ₹1,410 is needed to ease the downside pressure. Such a break will take the stock higher to ₹1,450 and ₹1,470 levels. On the other hand, if Infosys breaks below ₹1,370, it can come under pressure. In such a scenario, a fall to ₹1,330 or ₹1,320 is possible on the back of profit-booking. Long-term investors can book partial profits at ₹1,360 if the stock declines below ₹1,370. Keep the stop-loss for the rest of the position at ₹1,290. Medium-term investors can revise the stop-loss higher to ₹1,360.

Uptrend gains momentum in RIL

RIL (₹1,278)

The uptrend in RIL is gaining momentum. The stock surged over 6 per cent last week. Immediate resistance is at ₹1,290, which is likely to be tested in the near term. A break above it can take the stock to ₹1,310. Further break above ₹1,310 will then target ₹1,330 or even higher levels. On the other hand, if RIL reverses lower from either ₹1,290 or ₹1,310, a corrective fall to ₹1,260 in the near term is possible. Further break below ₹1,260 will then increase the likelihood of the downmove extending to ₹1,250 or ₹1,235. The stock will come under pressure if it declines below ₹1,235. Such a break can drag RIL to ₹1,195. However, the outlook will turn negative only if the stock breaks below ₹1,195 decisively. Short-term traders who have taken long positions at ₹1,190 levels can hold it with a revised stop-loss at ₹1,220. Move the stop-loss higher to ₹1,265 as soon as the stock moves up to ₹1,285. Book profits at ₹1,300.

 

Resistance caps the upside in Tata Steel

Tata Steel (₹575.4)

Tata Steel failed to decisively breach the psychological level of ₹600 last week. The stock made a high of 603.5 and fell sharply, giving back all the gains made during the week. A key support is near the current levels of ₹565. If the stock manages to reverse higher from this support, an up-move to ₹595 is possible. A strong break and a decisive close above ₹595 will boost the momentum and will pave way for a fresh rally to ₹620 or ₹630. As being reiterated over the last couple of weeks, ₹620-630 is a crucial resistance region. A strong break above ₹630 is needed to confirm that the downtrend that was in place since February has ended. On the other hand, if Tata Steel breaks below ₹565, a fall to ₹550 or ₹535 is possible. The outlook will turn bearish if Tata Steel breaks below ₹535. Such a break will then increase the likelihood of the stock revisiting ₹500 and ₹490 levels thereafter.

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