ITC, SBI, Tata Steel, Reliance Industries, Infosys -High Five stocks technical :: Business Line

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SBI (₹307.65)

The stock of SBI was stuck in a narrow range between ₹303 and ₹312 all through last week. The 21-day moving average resistance at ₹311 is limiting the stock’s corrective rally which began from the December 17 low of ₹287.2. A breakout on either side of ₹303 and ₹312 will decide the next leg of move for the stock. But since the preceding trend is down, a break and fall below ₹303 looks likely in the ensuing days. Such a fall can drag the stock lower to ₹295 and ₹290. In such a scenario, short-term traders can go short with a stop-loss at ₹312. However, the medium-term trend for the stock is up with strong support in the ₹267-265 zone. An immediate break below ₹265 looks unlikely at this juncture. Even if the stock moves southwards towards ₹265, it is likely to resume its uptrend from this level.

ITC (₹367.7)

The stock of ITC faces strong resistance at ₹378, which is a trendline, 38.2 per cent Fibonacci retracement level and 21-day moving average. The stock may not be able to breach this hurdle in the near term. It is expected to remain under pressure and can extend its fall to the level of ₹362 — the 21-week moving average support level. Whether the stock breaks below this level or reverses higher will decide the next leg of move for ITC. If the stock reverses higher from the level of ₹362, traders holding short positions can exit and consider booking profits, as the stock may rise to test its resistance at ₹378 once again. On the other hand, a strong fall below ₹362 will increase the selling pressure and drag the stock down to subsequent targets of ₹357 and ₹352 respectively.

Infosys (₹1,950.35)

Infosys was stuck in the ₹1,898-2,201 range for the third consecutive week. Short-term traders can stay on the sidelines until the stock breaks out of this ₹1,898-2,201 range and gives a clear signal. The 100-day moving average at ₹1,915 is a key level to watch on the downside. A decisive close below this level will increase the probability of a fall below ₹1,898. The stock can then target ₹1,865. Traders can thus go short with a stop-loss at ₹1,965. On the upside, the outlook will turn bullish if the stock records a close above the resistance at ₹2,016. This can take Infosys to the next targets of ₹2,065 and ₹2,100 and traders can go long with a stop-loss at ₹1,980. The medium-term trend remains positive, as long as the stock trades above ₹1,800. The stock can revisit ₹2,200 over the medium term.

RIL (₹889)

The stock of RIL fell 1.2 per cent last week. While it failed to breach ₹900 decisively, the stock will remain under pressure as long as it trades below ₹900. RIL is likely to test its 200-week moving average support at ₹861 this week. Short-term traders can go short with a stop-loss at ₹912. A decisive break below ₹861 can drag it lower to ₹830. On the other hand, a reversal from ₹861 will keep RIL moving in a sideways range of ₹861-910 for some more time. The short-term outlook will turn bullish on a break above ₹920. The next targets will be ₹950 and ₹975. The medium-term downtrend remains intact. But there is a key support coming up at ₹800. An immediate break below this level looks unlikely. There is a strong likelihood for the current downtrend to reverse from ₹800 in the coming weeks.

Tata Steel (₹398.15)

Tata Steel traded within a narrow range of ₹387-411 for the second consecutive week. The 100-week moving average at ₹388 has beeen providing a base for the stock over the past two weeks. A break out on either side of ₹387 and ₹411 will decide the short-term trend. A break below ₹387 is unlikely. Even if the stock breaks, the downside may be limited as it has a key medium-term channel support at ₹380. On the upside, the stock can move above ₹411 in the coming days and rise to ₹422 in the short term. A reversal from ₹380 can take the stock higher to target ₹450 in the medium term. Traders with a medium-term perspective can go long on the stock with a stop-loss at ₹378. Intermediate declines to ₹387 and ₹380 can be used as an opportunity to add long positions.