Jan 13: Pivotals: Reliance Industries, SBI, Infosys, Tata Steel :: Business Line

 

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Pivotals: Reliance Industries (Rs 839.2)

After testing key resistance at Rs 860, the stock fell 2.5 per cent last week forming a bearish engulfing candlestick pattern in the weekly chart. This pattern is a bearish reversal pattern. Nevertheless, the stock is hovering above key support at Rs 830. A strong fall below this level will be cue for initiating fresh short positions with same as stop-loss. In that scenario, the stock can decline to Rs 810 or Rs 800 in the short-term. Only a decline below Rs 800 will mar its short-term uptrend and drag it further down to Rs 770 in the ensuing weeks.

On the other hand, the stock needs to break through its important resistance at Rs 860 for the resumption of its medium-term uptrend. Subsequent resistances are at Rs 880 and Rs 900.

State Bank of India (Rs 2,490.9)

SBI was volatile and ended almost flat, shaping a doji candlestick in the weekly charts, implying neutral stance. The stock is currently testing its key resistance at Rs 2,500. We reaffirm that traders with a short-term perspective can consider taking partial profits off the table and re-enter on a decisive rally above Rs 2,500. Subsequent resistance is at Rs 2,600.

The stock is still testing its upper boundary of daily Bollinger bands and is reversing downwards. The stock is on the brink of a corrective decline and can move to Rs 2,400 and then to Rs 2,350 levels. An emphatic decline below Rs 2,240 will negate the stock’s short-term uptrend. Key supports below Rs 2,240 are at Rs 2,125 and Rs 2,060 levels.

As long as the stock trades above Rs 2,060 levels its medium-term trend will stay up. If this level holds, the stock can trend upwards and reach Rs 2,750 in the medium-term.

Infosys (Rs 2,712.6)

Infosys skyrocketed 17 per cent with extraordinary volumes and an upward gap on Friday after its December 2012 quarter results beat street expectations in all aspects. The up-move has decisively broken the key resistance at Rs 2,600 level. For the week, the stock has gained 15.5 per cent. However, the stock is facing resistance at Rs 2,750. Its daily indicators and oscillators are featuring in the overbought levels indicating that a near-term corrective decline is possible. Immediate key support is at Rs 2,600. Short-term traders should tread with caution as long as the stock trades below the key resistance level of Rs 2,750 in the ensuing week. Next support below Rs 2,600 is at Rs 2,500.

Strong breakthrough of Rs 2,750 will take the stock higher to Rs 2,900 in the medium-term.

Tata Steel (Rs 416.9)

The stock fell by 3.8 per cent in the previous week, after testing resistance at Rs 440. Traders with short-term perspective can initiate fresh short positions with stop-loss at Rs 428 levels. Near-term targets are Rs 407 and Rs 400. As long as Rs 400 holds, the stock’s short-term uptrend stays in place. But a decisive fall below Rs 400 will mitigate the uptrend and pull the stock further down to Rs 387 levels.

The stock has immediate resistances at Rs 430 and Rs 440 levels. Only a strong up move above Rs 440 will reinforce bullish momentum and take the stock northwards to Rs 460 and Rs 480 in the medium-term.