SBI continues to test the hurdle

The stock was volatile and closed the week on a marginally positive note. It continues to test a key resistance as well as the 50-day moving average at around ₹270. A positive start in the week ahead and a strong breach of the current resistance level will reinforce the bullish momentum and push the stock northwards to ₹280 and then to the upper boundary of the sideways range at ₹290 levels in the coming week. This will keep the stock in the medium-term sideways consolidation phase in a broad band between ₹258 and ₹290. We reiterate that traders with a short-term perspective can go long above ₹270 levels with a tight stop-loss. However any declines can find support in the base zone of ₹258- ₹260. An emphatic decline below ₹258 will drag the stock down to ₹250 and then to ₹241 in the short term. Subsequent key base is placed at ₹234.

ITC faces a key resistance ahead

The significant resistance at ₹318 and 50-day moving average hovering around this level capped rallies in the past week. It declined 1.8 per cent. The stock has been testing the resistance level ₹318 for the past three weeks. Only a decisive rally above this level can strengthen the bullish momentum and push the stock northwards to ₹331. Traders with a short-term perspective can consider buying the stock only on a strong breach with a fixed stop-loss. Subsequent key hurdles are placed at ₹342 and ₹350 levels. To alter the stock’s medium-term downtrend, it needs to strongly break ₹350 levels. On the other hand, declines can find support at the immediate base level of ₹300. The stock can remain on a near-term sideways movement in the band between ₹300 and ₹318 for a while. Next supports are placed at ₹285 and ₹273.

Infosys breaks a key support

The stock of Infosys tumbled 5.3 per cent with good volume breaking a key support at ₹970 levels which is also the lower boundary of its prior sideways range. With the fall, the stock has resumed its medium-term downtrend that has been in place from the February peak of ₹1166 levels. The short-term trend is also down. The stock hovers well below its 50- and 200-day moving averages. The relative strength index in the daily chart features in the bearish zone implying downward momentum. Further, those indicators in the weekly chart have entered the negative terrain. Traders can hold their short positions and initiate fresh shorts as well in rallies with a stop-loss at ₹955. Continuation of the downtrend can pull the stock down to ₹920 and then to ₹910 or ₹900. Key resistances are at ₹950, ₹970 and ₹985 levels. Strong rally above ₹985 is needed to alter the short-tern downtrend.

RIL moves in a sideways range

Last week, the stock was choppy and continued moving in the sideways range between ₹985 and ₹1,018. The relative strength index in the daily chart have re-entered the bullish zone from the neutral region. The daily price rate of change indicator has moved in to positive territory indicating buying interest. Other indicators in the weekly chart continue to feature in the positive territory implying bullish momentum. Medium-term trend is bullish of the stock. It trades well above 50- and 200-day moving averages. Only a strong breakthrough of the immediate resistance at ₹1,015 and ₹1,020 zone will have bullish implications and take the stock northwards to ₹1,035 and then to ₹1,050 levels. Traders with a short-term horizon should tread with caution and initiate fresh long position on a decisive rally above ₹1020 levels with a fixed stop-loss. Conversely, a fall below ₹980 can drag the stock down to ₹960 levels.

Tata Steel extends its fall

The stock plunged 6.6 per cent with good volume, decisively breaching the immediate support at ₹280 levels. Across all-time frames long, medium and short-term the stock is in a downtrend. It trades well below its 50- and 200-day moving averages. Traders with a short-term horizon can consider booking profits and then initiating fresh short position on rallies with a stop-loss at ₹295 levels. The stock can extend its downtrend and reach the price target of ₹271 and then ₹260. Next significant support for the stock is pegged at ₹250. An emphatic breakthrough of the immediate resistance at ₹300 is needed to alter the near-term downtrend and take the stock upwards to ₹310 or ₹320 levels. Key esistances beyond ₹320 are at ₹340 and ₹350 levels. Investors with a medium-term view should desist from trading in the stock.

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