Weekly Trading Guide

SBI (₹285.4)

SBI skyrocketed 15 per cent last week. The stock tested the ₹290-292 resistance region on Friday and has come-off slightly after making a high of ₹292.65. As long as it trades below ₹292, an intermediate dip to ₹280 or ₹276 cannot be ruled out. Key supports are at ₹279 and ₹276. A strong break below ₹276 can drag SBI initially to ₹268. A further break below ₹268 will then increase the likelihood of the stock extending its fall to ₹260 or ₹257 over the short term. On the other hand, if SBI manages to bounce from ₹276, the outlook will remain bullish. In such a scenario, the possibility of the stock breaching above ₹292 will be high. A strong break above ₹292 will trigger a fresh rally to ₹311. A further break above ₹311 can then take SBI to the next target of ₹322. Short-term traders with a high-risk appetite can go long on dips at ₹282 and accumulate at ₹279. Stop-loss can be placed at ₹271 for the target of ₹305. Revise the stop-loss higher to ₹285 as soon as the stock moves up to ₹292.

ITC (₹282.3)

ITC fell in the initial part of last week, but managed to bounce from the low of ₹273.15. The price action on the chart indicates that the stock is getting fresh buying interest below the support level of ₹275. This keeps the bias positive. An up-move to ₹287 and ₹292 is likely in the near term. Inability to breach ₹292 can drag it to ₹280 and ₹275 again. In such a scenario, a range-bound move between ₹275 and ₹292 can be seen for some time. But a strong break above ₹292 can take ITC higher to ₹298 and ₹300. A further break above ₹300 will then pave way for the next target of ₹307. The bullish outlook will get negated only if ITC makes a decisive close below ₹275. Such a break will increase the possibility of the stock falling to ₹270 or even ₹265 in the coming days. Traders can hold the long positions taken at ₹283 and ₹280. Retain the stop-loss at ₹273 for the target of ₹298. Revise the stop-loss higher to ₹285 as soon as the stock moves up to ₹289.

Infosys (₹662)

Infosys surged over 9 per cent intra week, but failed to sustain higher. The pull-back from ₹693.9 indicates that the stock is getting fresh sellers at higher levels. Near-term resistance is in the ₹680-682 region. As long as the stock trades below this resistance zone, a fall to test the key support level of ₹630 is possible again. If Infosys manages to bounce from ₹630, it can remain range-bound between ₹630 and ₹700. However, the outlook will continue to be negative as long as the stock remains below ₹700. An eventual break below ₹630 can drag Infosys lower to ₹600 and ₹590. Traders can hold the short positions taken at ₹670 and ₹675. Retain the stop-loss at ₹710 for the target of ₹600. Revise the stop-loss lower to ₹665 as soon as the stock moves down to ₹655. The outlook will turn positive only if the stock manages to rise past the psychological level of ₹700. The next targets are ₹720 and ₹730. However, such a strong up-move looks less probable at the moment.

RIL (₹1,074.2)

RIL traded in a narrow range between ₹1,047 and ₹1,093 last week. The near-term outlook is unclear. Immediate resistance is in the ₹1,088-1,090 region. If RIL manages to breach ₹1,090 decisively, an up-move to ₹1,130 or ₹1,135 is possible. A strong break above ₹1,035 will then increase the likelihood of the stock extending its rally to ₹1,185 or even ₹1,200. But a pull-back from ₹1,135 can drag the stock lower to ₹1,080 and ₹1,050 and keep it range-bound between ₹1,030 and ₹1,135 . On the other hand, if RIL fails to breach ₹1,090, it can break below the near-term support level of ₹1,050 and fall initially to ₹1,030. A further break below ₹1,030 will increase the selling pressure and drag RIL to ₹1,010 and ₹990 thereafter. Traders who have taken short positions at ₹1,075 and ₹1,085 on rallies last week should remain cautious. Stop-loss can be lowered to ₹1,105. Move the stop-loss further lower to ₹1,060 as soon as RIL declines to ₹1,045. Book profits at ₹1,015.

Tata Steel (₹573.7)

Tata Steel tumbled about 4 per cent intraweek to make a low of ₹530. However, it managed to reverse higher sharply, recovering all the loss, and closed over 4 per cent higher for the week. A key resistance is at ₹583. A strong break above it can take the stock higher to ₹595 and ₹600. It will also confirm an inverted head and shoulder pattern on the chart. A pull-back from the ₹595-600 region can find support in the broad ₹580-₹570 region. An eventual break above ₹600 can then target ₹615 and ₹625. On the other hand, if the stock reverses lower from ₹583, it can fall to ₹570 or ₹565. A further break below ₹565 will then increase the likelihood of the stock extending its fall to ₹550 and ₹540. Traders holding short positions at an average price of ₹561 should remain cautious and revise the stop-loss lower to ₹585. Move the stop-loss further lower to ₹557 as soon as the stock moves down to ₹552. Book profits at ₹540.

 

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