Weekly trading guide

Outlook turns negative for SBI (₹310.9)

 

SBI is facing resistance near ₹320. The stock fell over a per cent last week. An inability to breach ₹320 keeps the bias negative. A key support is at ₹307, but SBI looks vulnerable to break it. A break below ₹307 can take the stock lower to ₹300 in the near term. A bounce from ₹300 can see a relief rally to ₹305-307, but a break below ₹300 will increase the likelihood of the fall extending to ₹290 or even lower. Traders holding long positions at ₹315 and ₹308 should remain cautious. Move the stop-loss higher to ₹305. Exit the trade at ₹313 if the stock moves up from the current levels.

ITC hovers above key support (₹304.3)

 

ITC fell sharply after making a high of ₹310, and gave back all the gains made last week. The near-term outlook is unclear. An immediate support is in the ₹303-302 region. If ITC sustains above this support, a bounce to ₹310 is possible. In such a scenario, a range-bound move between ₹302 and ₹310 can be seen. A strong break above ₹312 is needed for ITC to gain fresh momentum and resume the current uptrend towards ₹320 and ₹325. But if it declines below ₹302, ITC can come under pressureand decline to ₹297. A further break below ₹297 can then drag it to ₹292 and ₹290.

Near-term view negative for Infosys (₹716.4)

 

 

Infosys tumbled over 4 per cent last week. The stock can fall further to test ₹705 and ₹703 in the near term. A bounce from the ₹705-703 support zone will give a breather and take Infosys higher to ₹715 and ₹720 again. But a strong break and a decisive close below ₹703 will increase the downside pressure. Such a break will turn the outlook bearish and take Infosys initially lower to ₹690. A further fall below ₹690 will then increase the likelihood of the stock testing ₹680 or even lower on profit-booking. It will also turn the possibility high of the stock tumbling to ₹650 over the short term.

RIL snaps two-week fall (₹1,382.9)

RIL snapped its two-week fall and surged over 3 per cent last week. The outlook is bullish. A test of ₹1,400 is likely in the near term. A decisive close above ₹1,400 will boost the bullish momentum. In such a scenario, RIL can surge to ₹1,460. A further break above ₹1,460 will then increase the possibility of the stock targeting ₹1,520 over the medium term. But if RIL reverses lower from ₹1,400, it can again fall to ₹1,350 and ₹1,320. In that case, it can remain range-bound between ₹1,320 and ₹1,400 for some more time. A breakout on either side of ₹1,320 or ₹1,400 will decide the next move.

Downside to be limited in Tata Steel (₹542.8)

 

Tata Steel is range-bound between ₹525 and ₹560. Within this range, a dip to ₹535 and ₹530 is likely in the near term. A break below ₹530 looks less likely as the bias and indicators on the charts are positive, suggesting the downside could be limited. But if Tata Steel declines below ₹530, a fall to ₹520 and ₹510 is possible. A bounce from ₹530 will see it moving higher to revisit ₹560 levels. A strong break above ₹560 will take the stock further higher to ₹570 and ₹580.

The writer is Chief Research Analyst at Kshitij Consultancy Services

Read the rest of this article by Signing up for Portfolio.It's completely free!

What You'll Get





Related

This article is closed for comments.
Please Email the Editor