Technicals- Reliance Industries, SBI, Tata Steel, Infosys :: Business Line

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Reliance Industries (Rs 862.6)

The stock was volatile and settled the week by gaining 2 per cent. However, short-term trend has been down for the stock from its January peak of Rs 954. Only a strong rally above Rs 900 will alter this trend and push the stock back to Rs 954 levels. As long as the stock’s key resistance at Rs 900 restrict its up move, it will remain range-bound between Rs 840 and Rs 900.

A decisive break out on either side is required to determine a clear short-term direction. On the downside, decline below Rs 840 will reinforce the bearish momentum and pull the stock down to its significant long-term support zone between Rs 800 and Rs 810. Subsequent supports for the stock are at Rs760 and Rs 740.

State Bank of India (Rs 2,196.5)

SBI fell 1.7 per cent in the previous week. But the stock still appears to be testing its key support in the band between Rs 2,200 and Rs 2,230. We restate that short-term traders should tread with caution as long as this support holds. A weak start in the upcoming week can breach the aforesaid support and drag the stock down to Rs 2,130 and then to Rs 2,080 levels in the short-term.

Significant resistances are positioned at Rs 2,280 and Rs 2,330. Only a promising up move above Rs 2,330 will take the stock higher to Rs 2,380 or to Rs 2,430 levels.

Medium-term trend is up for the stock. Decisive fall below Rs 2,080 will mitigate this uptrend and pull the stock down to Rs 1,950 levels.

Infosys (Rs 2,836.5)

Last week, the stock advanced 1.8 per cent and is testing the upper boundary of the sideways consolidation band between Rs 2,750 and Rs 2,835 levels. A conclusive breakout of the upper boundary will take the stock northwards to Rs 2,865 and then to Rs 2,900 in the short-term. Key resistance above Rs 2,900 is at Rs 3,000. Short-term traders should initiate fresh long positions only on a strong breakout of the upper boundary with as same stop-loss.

Important supports are at Rs 2,750, Rs 2,700 and Rs 2,650. The stock has been in a medium-term uptrend from its July 2012 low of Rs 2,101 levels. Only a strong decline below Rs 2,500 will mar this uptrend and pull the stock down to Rs 2,400 or Rs 2,300 levels.

Tata Steel (Rs 364.4)

Tata Steel tumbled 3 per cent accompanied by good volumes in the previous week, which was in line with our expectation. Short-term trend has been down since its January 2013 peak of Rs 448. The stock is hovering well below its 50 and 200-day moving averages. Both the daily and weekly indicators are featuring in the bearish zone implying downward momentum. As long as the stock trades below Rs 400 its downtrend will stay in place. Traders can consider holding their short positions with stop-loss at Rs 380. Downside targets are Rs 359 and Rs 350. Key support below Rs 350 is at Rs 335. Important resistances are at Rs 390, Rs 400 and Rs 410.