Weekly Trading Guide

SBI (291.8)

SBI tumbled over 5 per cent last week. The resistance at ₹312 has held well and the stock had reversed sharply lower after making a high of ₹312.2 in the early part of the week. The stock hovers above a crucial ₹290-285 support zone. If SBI manages to bounce from this zone, an up-move to ₹303 is possible. A strong break above ₹303 will bring back the positive momentum. Such a break can take the stock higher to ₹312 again. Further break above ₹312 will target to ₹320. On the other hand, if SBI breaks below ₹285 in the coming days, the downside pressure would increase. The stock can then test ₹280. A strong break below ₹280 will then increase the likelihood of the stock extending its down-move to ₹270 or even ₹260. However, the bias is positive and the possibility is high of the stock sustaining above the ₹290-285 support zone. Medium-term traders can hold the long positions. Retain the stop-loss at ₹283. Revise it higher to ₹301 as soon as the stock moves up to ₹318.

ITC (₹310.4)

ITC failed to sustain the bullish momentum last week. The stock made a high of ₹322.7 and reversed sharply lower, declining 2.7 per cent for the week. However, the support at ₹307 has held well, as expected, and the stock is sustaining above it in a narrow range. As long as the stock remains above ₹307, the possibility is high of it revisiting ₹320 or ₹323 levels in the coming days. Inability to breach ₹323 can drag the stock lower to ₹310 and ₹307 again. In such a scenario, ITC can trade sideways between ₹307 and ₹323 for some time. An eventual break above ₹323 will see the stock targeting ₹327 over the short term. The level of ₹327 is a crucial resistance for the stock. A strong break above it will pave way for a fresh rally to ₹360 over the medium term. Investors can hold the long positions and retain the stop-loss at ₹265. The near-term outlook will turn negative if ITC breaks below ₹307 decisively. Such a break can drag the stock lower to ₹300 or ₹295 on the back of profit-booking.

Infosys (₹733.1)

Infosys surged over 4 per cent intra-week but failed to retain the momentum. The stock made a high of ₹748.4 and reversed lower, giving back some of the gains. The weekly candlestick reflects an indecisiveness in the market. A near-term support is at ₹719. A break below it can take Infosys lower to ₹708 — the crucial 21-day moving average support. On the other hand, if Infosys manages to sustain above ₹719, a bounce to ₹750 is likely. A strong break above ₹750 will then pave way for the next target of ₹800 or even higher levels. Long-term investors who have booked partial profits at ₹740, as advised, can retain the rest of the positions with a stop-loss at ₹630. As mentioned last week, the uptrend in Infosys will come under threat only if it falls decisively below the 21-day moving average (₹708) support. Such a break will trigger a fall to ₹675 on the back of profit-booking. Further break below ₹675 will then increase the possibility of the stock extending the decline to ₹660 or even lower.

RIL (₹1,276.7)

RIL fell last week as expected. But the down-move was short-lived. The stock made a low of ₹1,210 and bounced back sharply, recovering the loss. It closed 2.9 per cent higher for the week. The support at ₹1,210 has held well, as expected, and the strong bounce has kept the bullish outlook intact. Near-term support is at ₹1,255 which can limit the downside. An up-move to ₹1,300 is likely in the near term. A strong break above ₹1,300 will then increase the likelihood of the rally extending to ₹1,340 or ₹1,360. Short-term traders with a high-risk appetite can go long at current levels and accumulate on dips at ₹1,260. Stop-loss can be placed at ₹1,220 for the target of ₹1,245. Revise the stop-loss higher to ₹1,285 as soon as the stock moves up to ₹1,305. The region between ₹1,340 and ₹1,360 is a crucial long-term resistance and the price action around this hurdle will need a close watch. The near-term view will turn negative if RIL declines below ₹1,210. In such a scenario, the stock can fall to ₹1,175.

Tata Steel (₹619)

Tata Steel has rallied 2.9 per cent last week and closed on a strong note. Though the stock fell initially, the 21-day moving average support at ₹588 has halted the fall. The outlook is bullish. The rally over the last couple of weeks strengthens the case for an upward reversal. An up-move to ₹635 or ₹640 is likely in the near term. A strong break and a decisive close above ₹640 confirm the trend reversal. Such a break will boost the momentum and increase the possibility of the stock revisiting ₹700 and ₹750 levels. Cluster of supports are poised in the band between ₹590 and ₹575. The outlook will turn negative only if Tata Steel declines decisively below ₹575. But such a fall looks less probable at the moment as the price action suggests that the stock is getting fresh buying interest below ₹600. Traders with a medium-term perspective can go long at current levels and accumulate on dips at ₹605, ₹590 and ₹585. Stop-loss can be placed at ₹560.

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