Reliance Industries prolonged its volatile movement in the week ago. After testing the key resistance at Rs 890 initially, the stock gave away most of its gains. Nevertheless, its short-term trend is up and the stock is trading well above its 200-day moving average. Traders with short-term perspective can consider holding their long positions with revised stop-loss at Rs 850. We expect the stock to test the key resistance at Rs 890 once more in the ensuing week. A strong breach of this resistance can take the stock higher to Rs 920 levels. Next important resistances are pegged at Rs 940 and Rs 955.

On the other hand, decline blow Rs 850 can pull the stock down to Rs 830 or even further down to the key support band at Rs 800 and Rs 810 in the short-term. Support below Rs 800 is in the zone between Rs 770 and Rs 780. The stock is in a medium-term sideways consolidation phase in a wide range between Rs 770 and Rs 920.

State Bank of India (Rs 1,662.9)

Last week, State Bank extended its up-move by gaining 1.8 per cent. The stock surpassed its key resistance at Rs 1,640 and is now facing next resistance at Rs 1,710. Its daily relative strength index is moving higher in the neutral region towards the bullish zone and the weekly RSI is on the brink of entering the neutral region. Short-term traders can initiate fresh long positions while maintaining stop-loss at Rs 1,630 level. Targets are Rs 1,710 and then Rs 1,800. Strong rally above these levels can take the stock’s corrective up-move to Rs 1,900 level. But as long as the stock trades below Rs 2,000, its medium-term downtrend will be in place. The stock needs to decisively jump above this level to revise its medium-term downtrend.

Conversely, an inability to rally and a tumble below Rs 1,600 can pull it down to its key support in the band between Rs 1,500 and Rs 1,510. Next base level is around Rs 1,400.

Infosys (Rs 3,028.2)

After testing the upper boundary at Rs 3,130, the stock gave away most of its initial gains last week. Further, the stock’s daily indicators are displaying negative divergence signalling that it is on the brink of a trend reversal. Hence, we reiterate that short-term traders should stay alert as long as the stock trades in the band between Rs 2,950 and Rs 3,130. Conclusive fall below Rs 2,950 levels can drag the stock down to Rs 2,900 or even to Rs 2,800 in the short-term.

However, the medium-term trend will remain up as long as the stock stays above Rs 2,600 levels. Medium-term investors can remain invested with stop-loss at Rs 2,600 or can consider taking profits at this juncture and re-enter later. Strong upward break of Rs 3,130 can accelerate the stock to Rs 3,225 levels.

Tata Steel (Rs 298.2)

The stock was choppy last week - it initially surpassed its key resistance at Rs 300 strongly and later declined, signalling it to be a false breakout. But, the stock continues to test its significant resistance level Rs 300. We restate that only an emphatic move above this resistance can push the stock higher to Rs 320 and to Rs 340 in the forthcoming weeks. Traders with a short-term perspective should tread with caution in the week ahead.

Important supports are positioned at Rs 290, Rs 274 and then at Rs 260. As long as the stock trades above Rs 250 its short-term trend will remain up. Strong fall below Rs 250 will mar its uptrend and pull the stock down to Rs 230.

Related Topics
comment COMMENT NOW