Weekly Trading Guide

SBI plummeted 7 per cent last week breaking below the key support levels of ₹275 and ₹270. The stock made an intra-week low of ₹253.6 and recovered some of the loss before closing the week at ₹270. Near-term resistances are at ₹275 and ₹278. As long as the stock trades below ₹278, the outlook will remain negative and a fall to ₹256 is possible. A bounce from ₹256 can take the stock higher to ₹270 levels again. In such a scenario, a range-bound move between ₹256 and ₹278 is possible. But if SBI breaks below ₹256 decisively, it will increase the likelihood of the stock tumbling to ₹245 or ₹243 in the coming weeks. Traders can go short if SBI reverses lower from the ₹275-278 resistance region. Stop-loss can be placed at ₹291 for the target of ₹245. Revise the stop-loss lower to ₹270 as soon as the stock moves down to ₹260. The outlook for the stock will turn positive only on a strong rise past ₹278. In such a scenario, a relief rally to ₹287 and ₹290 is possible.

ITC managed to stay afloat amid a strong sell-off in the broader markets last week. The stock made a smart recovery after falling about 3 per cent intra-week and closed just 1 per cent lower for the week. This reflects the inherent strength in the stock. It will come under pressure only if it declines below ₹295. The next targets are ₹290 and ₹285. But as long as ITC sustains above ₹295, the broader uptrend will remain intact. Immediate resistances are at ₹307 and ₹309. A strong break above ₹309 will take ITC higher to ₹317 or ₹321 over the short term. Further break above ₹321 will then target ₹327 — the next crucial resistance level. As being reiterated over the last few weeks, a decisive break above ₹327 will boost the momentum and trigger a fresh rally to ₹360 over the medium term. Investors can hold the long positions and retain the stop-loss at ₹265. Traders with a medium-term perspective can make use of dips to go long at ₹298 and ₹293. Stop-loss can be placed at ₹270 for the target of ₹355.

Infosys tumbled 4 per cent last week. The sharp fall over the past week has taken the stock decisively below the 21-day moving average support that has been limiting the downside over the last five months. It also indicates early signs of the uptrend, that has been in place since September 2017, getting reversed. The region between ₹718 and ₹720 is a key resistance, which has to be breached to ease the downside pressure. Such a break can take Infosys higher to ₹740 and ₹750 levels again. But as long as the stock remains below ₹721, there is a strong likelihood of it breaking below the crucial support level of ₹690 in the coming days. Such a break will confirm the trend reversal and drag Infosys to ₹660. Further break below ₹660 will then increase the likelihood of the stock extending its down-move to ₹630 and ₹625. Short-term traders with high-risk appetite can go short on a bounce to ₹710 and ₹717. Stop-loss can be placed at ₹732 for the target of ₹670. Revise the stop-loss lower to ₹695 when it moves to ₹685.

RIL fell, breaking below the key support level of ₹1,225 and closed about 3 per cent lower for the week. A complex head-and-shoulder reversal pattern is visible on the chart. This is a bearish pattern indicating a reversal of the current uptrend .The neckline resistance of this pattern is poised around ₹1,237. Also, another key resistance is at ₹1,253. The outlook will turn positive only if RIL manages to breach ₹1,253. This will see the stock revisiting ₹1,300 and ₹1,320 levels. But as long as the stock trades below ₹1,253, a fall to ₹1,175 or ₹1,170 cannot be ruled out in the short term. A bounce from the ₹1,175-1,170 support zone can trigger a relief rally to ₹1,200 and ₹1,220. But a break below ₹1,170 will increase the likelihood of the stock falling to ₹1,100. Traders with a medium-term perspective can wait for a bounce and go short at ₹1,225 and ₹1,245. Stop-loss can be placed at ₹1,265 for the target of ₹1,120. Revise the stop-loss to ₹1,205 when the stock moves down to ₹1,190.

Tata Steel seems to have remained insulated from the broader market sell-off. Though the stock tumbled about 6 per cent intraday on Friday, it managed to recover all the loss and close the week 1.5 per cent higher. Key resistance is at ₹640. A strong break above it can take the stock higher to ₹680 and ₹700 thereafter. But if the sell-off in the broader market intensifies, the upside in this stock could be capped at ₹640. In such a scenario, Tata Steel can remain range-bound between ₹575 and ₹640 for some time. The outlook will turn negative only if Tata Steel declines below ₹575 — the 21-week moving average. Such a break can drag it to ₹550. But the price action on the chart indicates that the stock is likely to sustain above ₹575. Medium-term traders can hold the long positions and retain the stop-loss at ₹560. Revise the stop-loss higher to ₹620 as soon as the stock moves up to ₹635. Move the stop-loss higher to ₹635 as soon as Tata Steel moves up to ₹655.

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