Weekly Trading Guide

SBI (₹294.4)

SBI is managing to sustain higher. The stock dipped to an intraweek low of ₹287.2, but reversed immediately higher from there. The resistance at ₹301 is likely to be tested in the near term. Inability to breach ₹301 can pull SBI lower to ₹290 and ₹287 again. But the price action on the chart leaves the bias bullish for the stock to break above ₹301 and rally towards ₹310 and ₹312. A further break above ₹312 will increase the likelihood of the stock targeting ₹320 and ₹322. The region around ₹322 is a crucial long-term resistance. The price action around this hurdle will need a close watch to get a cue on the next direction of move. Supports are at ₹287 and ₹284.5. The near-term view will turn negative only if SBI declines below ₹284.5. The next target is ₹280. But such a fall looks less probable at the moment. Traders who have taken long positions above ₹294 can hold with a stop-loss at ₹282. Move the stop-loss higher to ₹301 as soon as the stock goes up to ₹307. Book profits at ₹318.

ITC (₹281.9)

ITC inched higher for the third consecutive week. The stock was up 2 per cent last week. Immediate resistance is at ₹284 and support at ₹278. The stock is likely to breach ₹284 and test ₹287 in the near term. A break above ₹287 can then target ₹290. The levels of ₹287 and ₹290 are key resistances, and whether ITC breaches these hurdles or not will decide the direction of the next move. A decisive break above ₹290 will boost the momentum and take ITC higher to ₹296 and ₹300 thereafter. Such an up-move will also confirm the end of the downtrend that has been in place since September. On the other hand, if ITC reverses lower from ₹287 or ₹290, it can fall to ₹280 and ₹275 again. In such a scenario, the stock can remain range-bound between ₹275 and ₹290.

Infosys (₹657.6)

Infosys fell in the initial part of the week but managed to claw-back from the low of ₹637.7 and closed 2 per cent higher. The near-term outlook is unclear. The 200-day moving average support at ₹649 is holding well . Key resistances are at ₹663, ₹666 and ₹671. As long as Infosys trades above ₹649, a test of the above-mentioned hurdles is possible in the near term. A strong break and a decisive close above ₹671 will turn the outlook to positive and take the stock higher to ₹682 and ₹686. A further break above ₹686 will then pave way for the next short-term targets of ₹700 and ₹710. The stock will come under pressure if it breaks decisively below the 200-day moving average. Such a break can take the stock initially lower to ₹630. A break below ₹630 can then drag it to ₹600 and ₹590. Traders who took short positions last week at ₹660 should remain cautious. Revise the stop-loss lower to ₹675. Move the stop-loss further lower to ₹655 as soon as the stock moves down to ₹645. Book profits at ₹630.

RIL (₹1,125.8)

RIL reversed sharply higher last week after making a low of ₹1,066.5 and closed 2 per cent higher. The upward reversal has happened from the 200-day moving average, which has been providing strong support for the stock since October. The near-term view is positive and RIL can move up to ₹1,180 and ₹1,185. The stock has been range-bound between ₹1,050 and ₹1,185 for more than three months now. Its ability to bounce higher every time it dips to the 200-day moving average keeps the bias positive . The possibility is also high of the stock breaking above ₹1,185. Such a break will take RIL initially higher to ₹1,205 or ₹1,210. A strong break and a decisive close above ₹1,210 will then boost the momentum and pave way for the next target of ₹1,275. Medium-term investors can go long at current levels and accumulate on dips at ₹1,095 and ₹1,070. Stop-loss can be placed at ₹1,025. The outlook will turn negative only if RIL closes decisively below the 200-day moving average support. In such a scenario, the stock can fall to ₹1,000 and ₹990.

Tata Steel (₹513.7)

After inching higher for two weeks, Tata Steel reversed last week. Trading in the stock was subdued. It was stuck in a narrow range between ₹505 and ₹521 last week. The 21-day moving average at ₹519 is restricting the upside. A strong break and a decisive close above this hurdle is needed to ease the downside pressure. Such a break can take the stock higher to ₹533 or even ₹539 over the short term. Inability to breach ₹533 or ₹539 can trigger a pull-back move to ₹520 and ₹518. But a strong break above ₹539 will boost the momentum and take the stock higher to ₹546 and ₹550. On the other hand, if Tata Steel remains below the 21-day moving average resistance, a fall to ₹505 or ₹500 is possible in the near term. A break below ₹500 will then increase the likelihood of the stock tumbling towards ₹480. A bounce from ₹480 can keep the stock range-bound between ₹480 and ₹530 for some time. But a decisive break below ₹480 can then drag Tata Steel lower to the crucial support level of ₹460.

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