High Five: SBI, ITC, Infosys, RIL, Tata Steel

SBI (₹154.9)

The stock of SBI continued its downtrend by plunging almost 8 per cent in the week ago. Both medium and short-term trends are down for the stock. It trades well below its 50 and 200-day moving averages. Nevertheless, the stock has significant long-term support in the band between ₹150 and ₹160, which it is now testing. The daily relative strength index as well as price rate of change indicator display positive divergence, suggesting that trend reversal is possible. The indicators in the weekly chart feature in the oversold territory, which signifies likely recovery in the stock price. Moreover, there has been an increase in daily volume over the past five weeks. Therefore, short-term traders should tread with caution as long as the stock tests the current support zone. An upward reversal and a move beyond ₹174 will be an initial sign of recovery. Key resistances are at ₹185 and ₹200. But a fall below ₹150 can drag it to ₹140 and ₹130.

ITC (₹300.2)

Testing a key resistance at ₹325 where the 200-day moving average also acted as a hurdle, the stock resumed its medium-term downtrend. Last week, it tumbled 7 per cent breaking a key support at ₹310. The medium as well as short-term trends are down for the stock. It trades well below its 50 and 200-day moving averages. The daily relative strength index is featuring in the bearish zone and the weekly RSI has just entered this zone from the neutral region. Other indicators in the daily chart hover in the negative territory imply bearish momentum. The stock now tests a key long-term support at ₹300. An emphatic fall below this support will strengthen the downtrend and drag it down to ₹290 and then to ₹275 in the coming trading sessions. Traders can initiate fresh short position on a fall below ₹300 with a stop-loss at ₹307. Immediate resistances are at ₹310 and ₹317. The stock has to move above ₹317 to alter the short-term downtrend and take it higher to ₹331 levels.

Infosys (₹1,083.9)

Following a blip above the key resistance band between ₹1,160 and ₹1,170, the stock of Infosys reversed direction and tumbled 7.8 per cent last week. This fall has marred the medium-term uptrend by decisively breaking a key support in the ₹1,100-₹1,110 zone. The short-term trend is down. The stock now tests its 200-day moving average and support at ₹1,070 levels. The daily relative strength index has just entered the bearish zone from the neutral region and weekly RSI features in the neutral region. The daily moving average convergence divergence signals a sell. The indicators in the weekly chart have started to trend downwards. The short-term outlook is bearish for the stock. Traders with a short-term perspective can sell the stock in rallies while maintaining a stop-loss at ₹1,110. Strong fall below ₹1,070 can drag the stock down to ₹1,040 and then to ₹1,010. A strong rally above ₹1,110 can see the stock go up to ₹1,130 or ₹1,160.

RIL (₹906.3)

The stock of Reliance Industries extended its downfall by plummeting 6.8 per cent in the last week, breaking a key support and 200-day moving average. This decline has marred the stock’s medium-term uptrend. Since recording a 52-week high at ₹1,089 on January 15, the stock has been in a short-term downtrend. It hovers well below its 50 and 200-day moving averages. The daily relative strength index features in the bearish zone and weekly RSI is on the brink of entering the bearish zone from the neutral region. Both the daily and weekly price rate of change indicators hover in the negative terrain, implying selling interest. It can see a corrective up move. Traders with a short-term view can make use of the corrective rally to initiate fresh short position while maintaining a stop-loss at ₹935. The stock can re-test the support at ₹900. Strong fall below ₹900 can pull it to ₹875. Next support is at ₹850. Resistances are at ₹940 and ₹965.

Tata Steel (₹217.8)

The stock slumped 7 per cent with good volume, breaching a key support at ₹225 in the previous week. It appears to have resumed the downtrend again. Both the daily and weekly relative strength indices have entered the bearish zone from the neutral region. Also, the price rate of change indicator hovers in the negative territory indicating selling pressure. Traders can make use of rallies to sell the stock while retaining a fixed stop-loss at ₹226. The stock can test the key support at ₹200 in the short term. An emphatic plunge below the significant long-term support band between ₹195 and ₹200 can drag the stock down to ₹180 or ₹170 in the medium term. Key immediate resistances are pegged at ₹225 and ₹235. A decisive rally above ₹235 is needed to alter the short-term downtrend and take the stock up to ₹250. Subsequent resistances are at ₹260 and ₹275. To strengthen it, the stock needs to move above ₹260.

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