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

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Reliance Industries (Rs 784.6)

Reliance Industries lost Rs 22, reinforcing the short-term down-trend that began at the peak of Rs 855. But those holding short positions need to tread cautiously since the stock is already at key short-term support zone between Rs 760 and Rs 780. Reversal from this area can cause another upward move to Rs 836 or Rs 855.

Fresh short positions are advised only on strong move below Rs 760. This will open the way for decline to Rs 736 or Rs 706.

The zone between Rs 760 and Rs 780 is also significant from a medium-term perspective for the stock.

Bounce from here will imply the possibility of move towards Rs 1,000 or above in the months ahead while decline below Rs 750 will mean a re-test of the Rs 680 trough.

State Bank of India (Rs 2,023.1)

SBI attempted to find its feet last week but slid further to close Rs 28 lower. The short-term trend in the stock is extremely weak. But the stock is nearing a cluster of short-term supports at Rs 1,976 and Rs 1,944.

A bounce from these supports will pull the stock higher to Rs 2,150 or Rs 2,186. But investors can confirm a short-term trend reversal only on a close above the second target at Rs 2,186.

If SBI keeps sliding below Rs 1,944, the next short-term support zone is around Rs 1,800.

The medium-term trend in the stock is sideways in the band between Rs 1,800 and Rs 2,500 since January 2012. The upper boundary needs to be breached to make the long-term view positive.

The stock appears to head towards the lower end of this band. Breach of this level will see the long-term support at Rs 1,571.

Infosys (Rs 2,446.9)

The euphoric reaction to the return of its former Chairman to the helm of affairs could not sustain and the stock retreated from Monday’s high of Rs 2,625 to end with a black candlestick in the weekly chart.

The stock also reversed from its 200 day moving average on Monday.

The stock has immediate support at Rs 2,410 and Rs 2,362.

Reversal from the current level can take the stock to Rs 2,550 or Rs 2,625 in the week ahead. Target above the Rs 2,625 level is Rs 2,700.

The medium term down-trend in the stock will be salvaged only on a move above Rs 2,700. The long-term support zone between Rs 2,000 and Rs 2,200 will continue to provide buying opportunity to long-term investors.

Tata Steel (Rs 292)

Tata Steel spent the week moving in an extremely narrow range between Rs 290 and Rs 305.

Short-term resistance for the stock exists at Rs 302.

Traders can play short in this stock as long as it trades below this level with stop loss at Rs 307. Downward target on breach of the Rs 290 level are Rs 280 and Rs 268.

Fresh shorts are however not advised on close above Rs 312.

The long-term trend in Tata Steel is under serious threat.

The close below January 2012 low at Rs 332 does not bode well for this stock. Unless it manages to climb above this level soon, the slide can prolong to Rs 270.