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ITC (₹253.8)
ITC fell 2.5 per cent last week. A key support is at ₹250 which is likely to be tested early this week. A reversal from the support level of ₹250 will increase the possibility of a rally to ₹262 levels. Further break above ₹262 can take the stock of ITC higher to ₹268 and ₹270, which is a key resistance zone. Inability to break above this level can trigger a fall to ₹262 and ₹260. A break below ₹260 can drag it further to ₹255 and ₹250 once again. But a strong break and a decisive close above ₹270 will boost the bullish momentum and can trigger a fresh rally to ₹290 and ₹295 in the short term. On the other hand, if the stock breaks below ₹250 this week, it can extend its fall to ₹245. Further fall below ₹245 looks less likely at the moment as the presence of a trend line and the 21-week moving average at around ₹245 makes this level a strong support. Investors can hold the long positions. Accumulate on dips near ₹250 and ₹245. Retain the stop-loss at ₹235. Revise the stop-loss higher to ₹240 as soon as the stock breaks above the level of ₹270.
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