Weekly Trading Guide

Short-term outlook bullish for SBI  (₹272.7)

The support at ₹262 has held well for SBI last week. The stock made a low of ₹261 and reversed higher to close the week on a strong note. The short-term outlook is bullish. Immediate support is at ₹270. Next significant support is poised in the ₹265-263 region. An immediate resistance is at ₹273 — the 100-week moving average. But the price action last week leaves the possibility high of the stock breaching this hurdle. A rally to ₹281 or ₹285 is likely in the coming days. The region around ₹285 is a key short-term resistance. Inability to break above ₹285 can trigger a pull-back move to ₹274 or even lower. But a strong break and a decisive weekly close above ₹285 will confirm the end of the downtrend that has been in place since last November. In such a scenario, SBI can gain fresh momentum and rally to ₹310 and ₹320 levels thereafter. Traders who took long positions last week on dips at ₹262 can hold with a revised stop-loss at ₹267. Move the stop-loss higher to ₹275 as soon as the stock moves up to ₹279.

ITC hovers above a key support (₹267.8)

ITC was volatile and range-bound in the past week. The 100-week moving average at ₹267 has limited the downside all through last week. If ITC sustains above this support, a range-bound move between ₹267 and ₹272 is possible. A breakout on either side of ₹267 or ₹272 will then determine the next move for ITC. A break above ₹272 can trigger a relief rally to ₹275 or ₹277. But if ITC breaks below ₹267, it can fall to ₹264. Further break below ₹264 can increase the downside pressure. Such a break can drag the stock lower to ₹257 or ₹255 in the short term. The price action on the daily chart leaves the bias negative and keeps the possibility high of the stock breaking below ₹267 in the coming days. However, such a fall to ₹255 could be a good buying opportunity for long-term investors. As mentioned last week, the level of ₹250 is a strong medium-term support that is likely to halt the fall. A break below ₹250 is less probable. Investors can hold their long positions and accumulate on dips near ₹255. Retain the stop-loss at ₹220.

Infosys gears up for record highs  (₹1,259.7)

Infosys surged over 3 per cent last week. This confirms the end of the prolonged sideways consolidation between ₹1,100 and ₹1,200 that has been in place since January. It also marks the resumption of the uptrend that has been in place since last September. With last week’s strong rally, this uptrend has gained momentum. The previous high of ₹1,278 recorded in June 2016 is likely to be tested. A strong break above ₹1.278 will take Infosys to ₹1,300 initially. Inability to break above ₹1,300 in the first attempt can trigger a pull-back move to ₹1,250 or ₹1,245. But such a pull-back could be short-lived. An eventual break above ₹1,300 will see Infosys surging to ₹1,350 or even higher levels. From a long-term perspective, the current rally in Infosys is likely to target ₹1,450 levels in the coming months. Both medium- and long-term investors can hold the long positions. Strong support is poised around ₹1,200. The outlook for the stock will turn negative only if it breaks below this support level. But such a break looks unlikely.

Near-term view positive for RIL (₹983.4)

RIL surged 5.8 per cent last week and closed on a strong note. Immediate supports are at ₹967 and ₹960. The near-term view will turn negative only if the stock breaks below ₹960. Such a break can take the stock lower to ₹930 or ₹910. But, as long as RIL remains above ₹960, the near-term view will be positive. A rally to ₹1,000 is likely . A break above ₹1,000 will see the up-move extending towards the key short-term resistance poised in the ₹1,020-₹1,025 resistance region. Inability to break above ₹1,025 can trigger a corrective fall to ₹970 or ₹960 initially. It will also keep the ₹870-₹1,020 sideways intact. RIL has been stuck inside this broad range since last November. As such, a pull-back move from ₹1,000 or ₹1,020 will leave the possibility high of the stock revisiting ₹900 levels. Traders can avoid trading this stock until a clear trend emerges. On the other hand, if RIL breaks above ₹1,025 decisively, it can gain strength. Such a break can take the stock higher to ₹1,040-1,050 — a key medium-term resistance region.

Key resistance ahead for Tata Steel  (₹599.5)

Contrary to an expectation of a fall, Tata Steel reversed sharply higher last in the past week. The stock surged 7 per cent last week, triggering the stop-loss on the short positions recommended a couple of weeks back. Immediate resistance is at ₹610. Inability to break this hurdle can trigger a pull-back move to ₹585 or ₹575. A break below ₹575 will then increase the likelihood of the fall extending to ₹568 or even ₹560. On the other hand, if Tata Steel breaks above the immediate resistance at ₹610, the current up-move can extend to ₹630 or ₹635 in the short term. Whether Tata Steel breaks above ₹635 or not will be key in deciding the next move. A pull-back from ₹635 can drag the stock to ₹600 or even lower. In such a scenario, the broader ₹550-635 sideways will remain intact. On other hand, if Tata Steel breaks above ₹635 decisively, it can gain momentum to move higher to ₹645 initially. It will also signal the end of the corrective fall that has been in place since January this year.

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