Weekly Trading Guide

SBI has been struggling over the last few weeks for strong follow-through buyers to take it decisively above ₹300. But, at the same time, the stock is also not attracting fresh sellers to drag it sharply lower. This leaves the bias bullish. The 21-day moving average at ₹289 is a key near-term support. As long as SBI trades above this support, the possibility of the stock breaching the ₹300-₹302 support zone is high. Such a break will take the stock higher initially to ₹310 and ₹312. A further break above ₹312 can then target ₹320 and ₹322. As mentioned last week, a crucial long-term resistance is poised around ₹322. As such, the price action around it will need a close watch to get a cue on the direction of the next move. The near-term view will turn negative if SBI declines decisively below ₹289. In such a scenario, a fall to ₹282 or ₹280 is possible. Traders who have taken long positions above ₹294 can hold it with a stop-loss at ₹282. Move the stop-loss higher to ₹301 as soon as the stock moves up to ₹307. Book profits at ₹318.

ITC was stuck in a sideways range between ₹277 and ₹284 last week. The resistance at ₹284 is continuing to cap the upside for the third consecutive week. A strong break above this hurdle is needed to ease the downside pressure for the stock. Such a break can take ITC higher initially to ₹287 and ₹290 — the next key resistance levels. If ITC manages to breach ₹290 decisively, the stock can gain momentum and target ₹296 and ₹300. But a pull-back from ₹290 can drag the stock lower to ₹285 and ₹280 again. On the other hand, if ITC continues to trade below ₹284 in the coming days and declines below ₹277, it can test ₹275 and ₹274. The outlook will turn completely negative if the stock breaks decisively below ₹274. In such a scenario, there is a strong likelihood of the stock tumbling towards ₹270 and ₹268. But the price action on the chart makes the bias bullish for ITC to break above ₹284. Medium-term investors who have taken long positions at ₹282 and ₹278 can hold it. Retain the stop-loss at ₹262.

Infosys seems to be lacking strength. The stock inched up in the initial part of the week but failed to sustain higher. Infosys made an intraweek high of ₹677 and came-off sharply giving up almost all the gains made during the week. The near-term outlook is unclear. The 200-day moving average at ₹650 is a crucial support to watch out for. If Infosys manages to sustain above this support, a bounce to ₹675 and ₹680 is possible in the near term. A strong break above ₹680 will ease the downside pressure and take the stock higher to ₹700 and ₹710 levels thereafter. The region around ₹710 is a significant resistance. A strong break and a decisive close above ₹710 is needed to turn the outlook completely to positive. Such a break will then pave way for the next targets of ₹750 and ₹760. On the other hand, if Infosys declines decisively below the 200-day moving average, it can come under renewed pressure. In such a scenario, a fall initially to ₹630 can be seen. A further break below ₹630 can then drag the stock lower to ₹600 and ₹590.

RIL has been stuck in a sideways range between ₹1,050 and ₹1,150 over the last one month. Within this range, the stock fell 2 per cent in the past week. A breakout on either side of ₹1,050 or ₹1,150 will determine the direction of the next move. The 200-day moving average support is at ₹1,069. A decisive close below this support will increase the possibility of the stock declining below ₹1,050. A break below ₹1,050 will take RIL initially lower to ₹1,020. A further break below ₹1,020 will then increase the possibility of the stock tumbling towards ₹900 or even ₹980 thereafter. On the other hand, if RIL sustains above the 200-day moving average support, the bias will remain positive. A strong break above ₹1,150 will ease the downside pressure. The next targets are ₹1,190 and ₹1,200. A strong break above ₹1,200 will turn the outlook to positive and will pave way for a revisit of ₹1,250 and ₹1,300. Medium-term investors can hold the long positions taken at ₹1,125 and ₹1,095. Retain the stop-loss at ₹1,025.

Tata Steel tumbled 5 per cent last week. The sharp fall last week indicates that the long-term downtrend in the stock is intact. Though there is a support near current levels at ₹480, Tata Steel looks vulnerable to break below it. A break below ₹480 can take the stock lower to ₹460. A further break below ₹460 will then increase the likelihood of the stock extending its fall to ₹430. Cluster of significant supports are poised in the broad ₹460-₹430 region. There is a strong likelihood of the current downtrend halting in this support zone. A strong upward reversal from this ₹460-₹430 support zone could be a good buying opportunity for investors with a long-term perspective. As such, the price action around the ₹460-₹430 support zone will need a close watch to get a cue on the next trend. On the other hand, if Tata Steel sustains above ₹480, a bounce to ₹500 or ₹510 can be seen. But the upside is likely to be capped as fresh sellers are likely to emerge at higher levels.

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