Technical Analysis

Weekly Trading Guide

Gurumurthy K | Updated on February 18, 2018 Published on February 18, 2018

SBI (271.7)

SBI slumped 8.3 per cent last week. The stock tumbled breaking below a crucial support level of ₹280. The sharp fall last week has intensified the downtrend. The region between ₹280 and ₹282 will now act as a strong resistance and cap the upside in the short term. Also, the level of ₹285 is a significant resistance which has to be breached for the outlook to turn positive. But such a break looks unlikely now.



Intermediate  bounce to this resistance may attract fresh sellers coming into the market. Immediate support is at ₹269. If SBI sustains above this support, a relief rally to ₹280 or ₹282 is possible. In such a scenario, a range-bound move between ₹269 and ₹282 can be seen for some time. However, the outlook will continue to be bearish. An eventual break below ₹269 will take the stock lower to ₹265 or ₹260. A strong break below ₹260 will increase the likelihood of the stock tumbling towards ₹251 over the medium term. Traders with high risk appetite can go short on rallies at ₹278 and ₹281. Stop-loss can be placed at ₹288 for the target of ₹265.

ITC (₹266.35)

ITC fell 1.8 per cent last week. However, the support at ₹265 has held very well in limiting the downside all through the week. The stock tested this support on Wednesday and remained range-bound above ₹265 for the rest of the week. If ITC sustains above ₹265, a range-bound move between ₹265 and ₹274 can be seen in the short term. Since the broader markets remain weak and vulnerable for further fall, the upside in



ITC could be capped in the short term. If the sell-off in the broader markets resume in the coming days, ITC can break below ₹265. Such a break will take the stock lower to ₹262 initially. Further break below ₹262 can take the stock lower to ₹260 or ₹257. Cluster of supports are poised in the broad ₹257-260 region. The pace of fall in ITC could be slow. Only a strong break below ₹257 will turn the outlook to negative. Such a break, though less likely at the moment, will increase the possibility of the stock tumbling towards ₹250 thereafter. Investors can hold the long positions and accumulate at ₹260. Retain the stop-loss at ₹220.

Infosys (₹1,124.8)

Infosys got a breather and witnessed a relief rally last week. The stock recovered all the loss made initially by bouncing from the low of ₹1,091.7 and closed 1.2 per cent higher for the week. Resistance is at ₹1,141 can be tested in the near term. If Infosys manages to surpass this hurdle, the current upmove can extend towards ₹1,156 or ₹1,158. Further rally beyond ₹1,158 looks unlikely at the moment.

A downward reversal from ₹1,158 or from ₹1,141 will see the corrective fall that has been in place since late January resuming. The stock can fall to ₹1,080 — the next crucial support. A break below ₹1,080 can drag Infosys lower to ₹1,050 or ₹1,030. However, indicators on the charts suggest that the uptrend is intact. The 21-week moving average is on the verge of crossing above the 100- and 200-week moving average. This is a bullish signal, indicating that the downside in the stock could be limited. Long-term investors can hold the long positions. Medium-term investors who have bought at ₹1,130 and ₹1,100 can accumulate at ₹1,085.

RIL (₹921.7)

Contrary to an expected fall, RIL reversed higher last week. The stock sustained above ₹900 and surged 2.6 per cent last week. The stop-loss on the short positions recommended last week was hit during this upmove. Immediate support is at ₹917 and the next key support is at ₹910. If RIL manages to sustain above these supports, a rise to ₹950 or ₹960 is possible. Whether the stock breaks above ₹960 or not will be key in determining the next move.


A decisive weekly close above ₹960 will bring fresh momentum. Such a break will increase the likelihood of the stock rallying towards ₹1,000 thereafter. But if RIL fails to breach ₹960 and reverses lower, it can fall to ₹930. Further break below ₹930 will increase the possibility of the stock revisiting ₹900. The level of ₹890 is a crucial support. A strong break and decisive close weekly below ₹890 will leave the stock under pressure. The stock can thus fall to ₹845 on the back of profit booking. Since the stock has been stuck in a broad sideways range, the fall after breaking below ₹890 could be swift.

Tata Steel (₹688.3)

Tata Steel opened the week with a wide gap-up of ₹35, but failed to retain the momentum thereafter. The stock made a high of ₹720.6 on Wednesday and fell consistently for the rest of the week. The immediate outlook is mixed. The price action in the coming week will need close watch to get a clear cue on the next move. Support for the stock is at ₹670, which is likely to be tested while the stock remains below ₹700. A strong break below ₹670 will increase the likelihood of the stock tumbling towards ₹645 or even ₹630 on the back of profit booking. On the other hand, if Tata Steel manages to reverse higher from the support ₹670, it can move up to ₹710 or ₹720 again. A strong break above ₹720 will ease the downside pressure and take the stock further higher to ₹750. Investors hold the long positions and retain the stop-loss at ₹630. Traders who have taken short positions last week at ₹710 can hold it with a revised stop-loss at ₹695. Move the stop-loss further lower to ₹685 as soon as the stock moves down to ₹675.

Read further by subscribing to

The Hindu Businessline

What You'll Get

  • Web + Mobile

    Access exclusive content of the Hindu Businessline across desktops, tablet and mobile device.

  • Exclusive portfolio stories and investment advice

    Gain exclusive market insights from the Hindu Businessline's research desk.

  • Ad free experience

    Experience cleaner site with zero ads and faster load times.

  • Personalised dashboard

    Customize your preference and get a personalized recommendation of stories based on your intrest.

This article is closed for comments.
Please Email the Editor