Weekly Trading Guide

SBI fell, breaking below the key support level of ₹279 in the past week. The stock was down 3.1 per cent. An important trend-line support is near the current levels at ₹272. Whether SBI sustains above this support or not will decide the direction of the next move. As long as the stock trades above ₹272, there is a strong likelihood of an up-move to ₹284 in the near term. A break above ₹284 can take the stock higher to ₹293 and ₹294. A strong break above ₹294 is needed to turn the outlook to bullish again. Such a break will boost the momentum and increase the possibility of the stock targeting ₹311 over the short term. On the other hand, if SBI breaks below ₹272, it will come under renewed pressure. In such a scenario, a fall to ₹263 and ₹260 is possible. Medium-term traders holding long positions at ₹282 and ₹279 should remain cautious. Retain the stop-loss at ₹269 for the target of ₹308. Revise the stop-loss higher to ₹287 as soon as the stock moves up to ₹291.

After moving up for two consecutive weeks, ITC reversed sharply lower last week. The stock tumbled over 4 per cent, giving back all the gains made in the previous two weeks. ITC has been broadly range-bound between ₹271 and ₹293 over the last two months. The stock tested ₹271 — the lower end of the range last week — and has bounced slightly from there. The price action in the coming days will need a close watch to get a cue on the next move. If it manages to sustain above ₹271 and gains momentum, the sideways movement between ₹271 and ₹293 will remain intact. In such a scenario, an up-move to ₹280 is possible in the near term. A break above ₹280 will then increase the likelihood of the stock moving further higher to ₹285 and ₹290. On the other hand, a decline decisively below ₹271 can put pressure on it. Such a break can trigger fresh selling in the stock and drag it to ₹263. A further break below ₹263 will then increase the possibility of the stock tumbling towards ₹253 in the coming weeks.

Infosys extended its up-move for the second consecutive week. The stock is up 2 per cent. The 100-day moving average resistance at ₹687 has restricted the upside all though last week. A strong break above this hurdle is needed for the stock to move up further. The next target is ₹697 — a crucial Fibonacci retracement resistance level. A break above it will take the stock initially to ₹706. A further break above ₹706 will then increase the likelihood of the stock extending its up-move to ₹720. On the other hand, if Infosys fails to breach the 100-day moving average resistance level of ₹687, it can fall to ₹665 or ₹657 in the near term. A range-bound move between ₹657 and ₹687 can be seen for some time. A breakout on either side of ₹657 or ₹687 will then determine the direction of the next move. A break below ₹657 can drag the stock lower to ₹642 — the 200-day moving average support. A strong break below ₹642 will increase the downside pressure and can take the stock lower to ₹620 or even ₹610.

RIL has been oscillating up and down over the last few weeks. The stock fell over 5 per cent during intra-week and made a low of ₹1,109.1. It has, however, bounced from the low to close 3 per cent lower for the week. The crucial support in the ₹1,110-1,100 region is holding well as of now. The long lower wick on the Friday’s candle indicates that the stock is getting fresh buyers in the ₹1,110-1,100 support region. As long as RIL trades above ₹1,100, the short-term outlook will remain positive. A near-term resistance is at ₹1,158, which is likely to be tested. A strong break above this hurdle can take the stock higher to ₹1,185 or even ₹1,200 over the short term. The level of ₹1,200 is a crucial short-term trend resistance. A strong break and a decisive weekly close above it is needed to indicate that the broader uptrend has resumed. The outlook for the stock will turn negative only if it breaks decisively below ₹1,100. Such a break will increase the likelihood of the stock falling to ₹1,050 — the 200-day moving average support level.

Tata Steel extended its down move for the third consecutive week and tested ₹500, as expected, last week. The stock was down 4.2 per cent and tumbled over 11 per cent in the last three weeks. A crucial support is in the ₹500-490 region, which is holding as of now. If Tata Steel manages to sustain above this support zone, a relief rally to ₹540 or ₹550 is likely and a range-bound move between ₹490 and ₹555 is possible for some time. But the bias on the chart continues to remain bearish. A strong break below ₹490 will increase the likelihood of the downtrend extending towards ₹460 in the coming weeks. The level of ₹460 is a crucial long-term support, which may have the potential to halt the current downtrend. As such, the price action around this support region will need a close watch. Traders can hold the short positions taken at ₹540 and ₹545 with a revised stop-loss at ₹527. Move the stop-loss lower to ₹495 as soon as the stock moves down to ₹485. Book profits at ₹465.

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