High Five: SBI, ITC, Infosys, Tata Steel, RIL

SBI tests a key resistance level (₹249.5)

After a muted start, the stock surged 2.8 per cent with good volumes on Friday. With this rally, the stock has breached the stock 21 and 50-day moving averages. The stock is on the brink of breaking the upper boundary of the sideways range between ₹235 and ₹250 since late October. However, the band between ₹255 and ₹260 is now a significant resistance level which needs to be breached for an up move to ₹270 and ₹280. The daily relative strength index is on the verge of entering the bullish zone from the neutral region. Both the price rate of change indicator feature in the positive area. Traders with a short-term view can initiate long position on a strong rally above ₹250 with a stop-loss at ₹246. The near-term targets are ₹260 and ₹270. Declines can find support at ₹240 and ₹235. A fall below ₹235 will mar the uptrend and pull it down to ₹230 and ₹220.

ITC can extend its rally (₹343.9)

After recording an intra-week low of ₹332, the stock rebounded and closed flat for the week. The key support at around ₹331 provides base for the stock. The medium-term trend has been up for the stock since its early June trough of ₹294. Within this trend, the stock trades in a sideways movement in the wide range between ₹331 and ₹360. The stock trades well above its 50 and 200-day moving averages. The indicators in the daily and weekly chart are showing mixed signs with a positive bias. Traders with a short-term horizon can buy the stock at current levels with a stop-loss at ₹338 and exit at ₹360 levels. An emphatic breakthrough of ₹360 will strengthen the stock’s medium-term uptrend and take it northwards to ₹370, which a key long-term resistance level. Significant supports to note are placed at ₹331, ₹320 and ₹310.

Infosys faces key barriers ahead (₹1,066.3)

Last week, the stock of Infosys managed to advance 1.3 per cent amid volatility in the market. However, the stock faces key resistance ahead at ₹1,075 — the 200-day moving average and a key resistance at ₹1,100. Only a strong rally above these levels will alter the stock’s short-term downtrend that has been in place from the October peak of ₹1,219. Such a rally will pave the way for an up move to ₹1,130 and then to ₹1,160 levels in the medium term. The indicators in the daily chart are just showing signs of recovering from the oversold levels. But failure to move past the aforementioned key resistances will drag the stock down to ₹1,030 and then to ₹1,010 levels in the medium term. Next key supports are at ₹990 and ₹970. Traders with a short-term perspective should tread with caution as long as the stock trades below ₹1,100 levels.

Near-term trend is up for RIL (₹979)

The stock of RIL surged 3.5 per cent last week, breaching the key immediate resistance level of ₹970. However, the stock faces next resistance at ₹990 and is testing it. The stock appears to have resumed its medium-term uptrend with the recent rally. It trades well above the 50 and 200-day moving averages. The short-term trend is also up. The indicators in the daily chart such as relative strength index and price rate of change hover in the positive territory backing the uptrend. Traders with a short-term view can buy the stock while maintaining a stop-loss at ₹968. The near-term targets are ₹990 and then at ₹1,010 levels. Further rally can push the stock higher to ₹1,025 and ₹1,050 in the short to medium term. On the other hand, a conclusive fall below the immediate support level of ₹970 will have bearish implication and drag the stock down to ₹940 and ₹912 levels.

Tata Steel continues to move sideways (₹231.2)

The stock of Tata Steel was choppy and closed on a flat note. In the short term, it remains in a sideways consolidation phase in a broad range between ₹200 and ₹255. The daily and weekly price rate of change indicators feature in the positive territory, implying buying interest. An emphatic rally above the immediate key resistance level of ₹235 can push the stock higher to ₹255 in the coming week. Traders can buy the stock above ₹235, with a fixed stop-loss for the target of ₹255. Both intermediate and medium-term trends are down for the stock. Since May high of ₹384, the stock has been in a medium-term downtrend. To alter this downtrend, the stock needs to conclusively move past ₹300. Key resistances above ₹255 are pegged at ₹265 and ₹285. Conversely, inability to surpass ₹235 can drag the stock down to ₹215 and ₹200.

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