Technical Analysis

Pivotals: Reliance Industries (Rs 711)

Yoganand D. | Updated on June 23, 2012 Published on June 23, 2012

Reliance Industries remained volatile and slipped 2 per cent in the past week. The stock is hovering above a key support level Rs 700. Fresh short positions are recommended only if the stock declines below Rs 700 with stop-loss at the same level. In such a scenario, the stock can decline to Rs 684 and to Rs 670 in the short-term. Important supports below Rs 670 are positioned at Rs 657, Rs 632 and Rs 610 levels.

However, strong breakthrough of the stock’s immediate resistance at Rs 730 will provide some bullishness and lift the stock higher to Rs 746. Decisive rally beyond Rs 746 can lift it higher to Rs 770 and to Rs 792. We restate that as long as the stock trades below Rs 790 levels, its medium-term trend remains down.

Infosys (Rs 2,475)

This stock too, fell almost 2 per cent last week. But it is taking support at around Rs 2,450. If the stock tumbles below Rs 2,450, it will be a cue for initiating fresh short positions with stop-loss at Rs 2,460. Downside targets are Rs 2,400 and Rs 2,350. Significant support for the stock is pegged at Rs 2,300.

On the other hand, the stock has key resistance at Rs 2,540, at which the floor of gap was formed in early April 2012. Conclusive breakthrough of this level will push the stock higher to Rs 2,600 and then to Rs 2,650 and Rs 2,700 in the medium-term.

Investors with medium-term perspective can consider accumulating the stock with stop-loss at Rs 2,200. Key long-term support between Rs 2,200 and Rs 2,300 is bolstering the stock. Nonetheless, strong decline below Rs 2,200 drag the stock down to Rs 2,000.

State Bank of India (Rs 2,156.7)

SBI recovered from its intra-week low of Rs 2,056 and trimmed its weekly loss to Rs 26 or 1.2 per cent. Short-term up trend that from the low of Rs 1,804 is still in place. Traders with short-term perspective can consider initiating fresh long positions only if the stock rallies above Rs 2,225. Targets are Rs 2,300 and Rs 2,374. However, inability to do so will confine the stock between Rs 2,044 and Rs 2,225 in the short-term.

On the contrary, slip below Rs 2,044 can drag the stock lower to Rs 1,956 or Rs 1,900.

Tata Steel (Rs 418.6)

After encountering resistance at Rs 430, the stock fell 2.7 per cent on Friday. The stock has formed a doji candlestick in the weekly chart indicating neutral stance. Short-term traders should tread with caution as long as Rs 430 is not breached emphatically. On a strong breakthrough of Rs 430 will pave way for a rise to Rs 440 and to Rs 452 levels. Significant resistance above Rs 452 is at Rs 470.

The stock has been on a medium-term downtrend since February 2012 peak of Rs 500. Only a decisive up move above the key resistance at Rs 470 will alter this downtrend and take the stock higher to Rs 500 in the forthcoming months.

Key supports to watch in the ensuing week are at Rs 405 and Rs 389.

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