Technical Analysis

Weekly trading guide

Gurumurthy K | Updated on April 21, 2019 Published on April 21, 2019

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

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