High 5 Stocks: SBI, ITC, Infosys, Reliance Ind, Tata Steel:: Business Line

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SBI

Last week, the stock gained 2.5 per cent and breached its 21-day moving average. But the stock faces key resistance at ₹320 levels and the current rally can come to a temporary halt around this level. Traders with a short-term perspective can hold their long positions with a stop-loss at ₹311 and consider exiting the stock at this resistance level. A break of ₹320 can pave an up move to ₹327 in the short term. But, the inability to break this resistance will keep the stock moving sideways between ₹305 and ₹320. A fall below ₹305 will pull the stock down to ₹295 or ₹287. Investors with a medium-term view can stay invested with a stop-loss at ₹265 levels. A decisive break-out of ₹327 will pave way for a medium-term up move to ₹340 or ₹350 levels.

ITC (₹368.2)

The stock ended on a flat note last week. It faces strong resistance at ₹378, its 21-day moving average. So, the stock may face difficulty in breaching this level in the coming week. The indicators and oscillators in the daily chart hover in the neutral region, indicating lack of strength. Volume is decreasing, signalling lack of momentum. Traders with a short-term perspective should tread with caution in the week ahead. A fall below the immediate support at ₹362 can drag the stock down to ₹357 and ₹352 levels in the short term. Key resistance above ₹378 is placed at ₹390 and ₹400. On the downside, below ₹352, the stock has supports at ₹345 and ₹340. Medium-term uptrend will come under threat if the stock falls below ₹345 levels.

Infosys (₹2013.4)

Infosys has climbed 3 per cent in the past week, reinforcing its bullish momentum. But the stock is testing its resistance at ₹2020 levels. Traders with a short-term horizon can buy above this levels with a stop-loss placed at ₹2000. A decisive rally can take the stock to ₹2060 and then to ₹2100 levels. Significant supports to note are placed at ₹1950 and ₹1900 levels. Only a fall below ₹1900 will re-inforce bearish momentum and pull the stock down to ₹1850 levels. The medium-term trend remains positive, as long as the stock trades above ₹1,800. The indicators in the weekly chart are featuring in the bullish zone backing the medium-term uptrend. Investors with a medium-term perspective can hold the stock with a stop-loss at ₹1800 levels. Strong rally above ₹2,100 can push it higher to ₹2,200 levels.

RIL (₹885.6)

The stock of RIL was stuck in a sideways range between ₹877 and ₹900. The 100-week moving average at ₹902 is a limiting a sharp rally in the stock. The immediate outlook is not clear. Traders can remain on the sidelines. The overall outlook is bearish, as long as the stock remains below ₹902. A break below the immediate support at ₹877 can drag RIL lower to ₹861 – the 200-week moving average support level. Traders can go short on such a break with a stop-loss at ₹885. The inability to rise beyond ₹900 decisively will keep the medium-term downtrend intact. So there is a danger of the fall extending to ₹800 – the key medium-term support in case if RIL declines below ₹877. The stock will need a strong break and close above ₹902 in order to make its outlook positive.

Tata Steel (₹410.8)

Tata Steel surged 3.2 per cent last week and is poised just below a crucial short-term resistance at ₹412.6. Traders can wait and watch. A reversal from here will be bearish. It can drag the stock lower to ₹400, ₹395 and ₹390. In this case traders can go short with a stop-loss at ₹415. But a strong break and close above ₹413 will be bullish. The stock can then target ₹423 — the 200-week moving average resistance level. Traders can go long with a stop-loss at ₹410. A further break above ₹423 can take the stock higher to ₹430. The medium-term trend is down. But the price action in the last three weeks suggests that the stock is forming a temporary bottom. Having said this, a corrective rally towards ₹440 cannot be ruled out.