Bellwethers

SBI is stuck in a sideways range (₹250.9)

SBI is stuck in a sideways range between ₹241 and ₹254 over the last three weeks. Resistance is in between ₹255 and ₹256. As long as it trades below ₹256, a dip to ₹245 or ₹240 is possible. In such a scenario, SBI may remain range-bound between ₹240 and ₹256 in the short term. A strong break above ₹256 can boost the momentum and take the stock up to ₹265 and ₹270. A subsequent break and a decisive close above ₹270 will signal the beginning of a fresh leg of up move that can target ₹290. Such a rally will also increase the likelihood of the stock testing its long-term resistance around ₹325 . Medium-term investors can hold the long positions and retain the stop-loss at ₹220. Accumulate longs on dips near ₹235. Revise the stop-loss higher to ₹230 as soon as the stock moves up to ₹295. On the other hand, if SBI breaks below ₹240 in the coming days, it can fall to ₹235 or ₹230. Further fall below ₹230 looks unlikely at the moment as a series of strong supports are available in the ₹235-₹230 region.

Outlooks is bullish for ITC (₹249.5)

ITC was range-bound last week. But the strong rise on Friday to close the week 2.8 per cent higher leaves the bias bullish . Immediate resistance is in between ₹251 and ₹252, which is likely to be tested this week. Inability to break above ₹252 can take the stock lower to ₹245 or ₹240 once again. In such a scenario, the stock may trade range-bound between ₹240 and ₹252 for some more time, A break below ₹240 can take it to ₹237 or ₹235. But such a break is less probable. The 21-day moving average is on the verge of crossing over the 200-day moving average. This is a bullish signal, suggesting that the downside could be limited . As such, ITC is more likely to break above ₹252 decisively. Such a break can take the stock higher to ₹260 or even ₹265. Inability to break above ₹265 and a subsequent reversal from there can trigger a corrective fall to ₹250 or even lower thereafter. But if ITC manages to surpass ₹265 decisively, it may pave way for a fresh rally to a new high of ₹300 over the medium term.

Immediate outlook is unclear for Infosys (₹975.1)

Infosys still struggles to rise past the psychological ₹1,000 mark for the sixth consecutive week. The stock spiked to a high of ₹1,045 on Friday on results, but fell immediately giving back all the gains to close the week on a flat note. The immediate outlook is not clear. The price action in the coming week will need a watch to get a cue on the next direction of move. The weekly chart suggests a range-bound move between ₹960 and ₹1,020. A strong break below ₹960 may see a revisit of ₹900. Such a fall will also keep intact the broader downtrend that has been in place since June 2016. Further break below ₹900 may drag Infosys lower to ₹850 or ₹830. The region around ₹800 is a strong long-term support for the stock. A subsequent reversal from there will signal the beginning of a fresh leg of long-term uptrend. On the other hand, if Infosys sustains above ₹960 and manages to rise past ₹1,020 decisively, it will ease the downside pressure. Such a break can take the stock higher to ₹1,060 or ₹1,080.

Bullish outlook is intact for RIL (₹1090.15)

RIL rose 1.6 per cent last week . Near-term resistance is around ₹1,100. Inability to break above this hurdle may pull the stock lower to ₹1,080 or ₹1,070. Significant support is in the ₹1,070-₹1,065 range. An immediate break below ₹1,065 looks less probable . Also, the downside could be restricted to the ₹1,050-₹1,045 support zone even if a break below ₹1,065 is seen. As such, there is a strong likelihood of the stock breaking above the psychological ₹1,100 barrier and extending the rally to ₹1,120 or ₹1,130 . It will also increase the possibility of the stock testing the key resistance around ₹1,160 thereafter. Medium-term investors can hold the long positions and retain the stop-loss at ₹1,010. Revise the stop-loss higher to ₹1,045 as soon as the stock moves up to ₹1,110. Low-risk appetite investors can book partial profits at ₹1,140. The stock will come under renewed pressure only if it declines below the ₹1,045. Such a break though unlikelymay drag RIL lower to ₹1,020 or ₹1,000.

Tata Steel gears up for a fresh rally (₹446.4)

Tata Steel surged 6.4 per cent and had closed on a stronger note for the second consecutive week. The rally last week has broken the prolonged ₹365-₹440 range that was in place since October. This has kept the broader bullish view intact. The level of ₹435 will now act as a good support for the stock. If it manages to sustain above this support, a rise to ₹475-₹480 will be possible in the coming weeks. Medium-term investors can hold the longs positions with a stop-loss at ₹340. Traders can move the stop-loss higher to ₹360 as soon as the stock moves up to ₹470. The level of ₹480 is a crucial resistance level. Inability to break above it can trigger a corrective fall to ₹450 or even ₹435. But a strong break and a decisive weekly close above ₹480 can boost the momentum and pave way for the next targets of ₹500 and ₹535. On the other hand, if Tata Steel breaks below ₹435, it can fall to ₹420 or even lower in the near term. But an immediate fall below ₹435 looks less probable.







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