Stocks update on Hindu

Reliance

Though RIL did not head lower as expected, the recovery was not convincing either. The evening star in the weekly chart has been followed by a harami, which implies indecision. The stock faced resistance from Rs 1,715. The short-term outlook will turn neutral only if the stock closes above Rs 1,735. Inability to do so will make the stock move lower to Rs 1,621 or Rs 1,566 shortly.

The medium-term outlook remains unaltered. We expect a dip to Rs 1,580. Investors can hold the stock with a stop at Rs 1,570. Fall below this level will signal the end of the move from Rs 1,262.

SBI

SBI has retraced 32 per cent of the up-move since April 2007. The next retracement target for the stock is at Rs 1,250, which is the medium-term trend deciding level.

Investors can hold the stock till it stays above Rs 1,250.

Momentum indicators too denote that though there can be weakness in the short-term, the larger trend is not under threat as yet.

Upper target for the week are at Rs 1,346 and then Rs 1,388.

Inability to move above Rs 1,346 will be a cue for traders to initiate fresh short positions with a target of Rs 1,180.

ACC

ACC is pausing just below the 50 day moving average positioned at Rs 825. The hurdle beyond this level will be at Rs 852.

Inability to move beyond Rs 852 will imply an imminent fall to Rs 760 again.

Fourteen-day RSI at 47 and 10-day ROC in the negative zone imply that the stock needs to move a little higher before the short-term outlook turns positive.

But the medium-term outlook will turn negative only on a close below Rs 768. Investors can hold the stock with a stop at Rs 760. Fall below Rs 760 will take the stock to Rs 680.

ONGC

ONGC bounced higher in line with our expectation to an intra week high of Rs 891. But a strong impediment exists at Rs 900. A reversal from this level can drag the stock down to Rs 842 and then Rs 801. The 200 DMA at Rs 850 should lend support in the near term.

Sustained sell signal in the weekly chart implies the continuation of the downtrend that began in April.

A close beyond Rs 935 is required to make the medium term positive for this stock. Investors can hold with a stop at Rs 840. Target beyond Rs 840 is Rs 760.

Infosys

Infosys could be charting the C wave of the flat correction that commenced from the April low of Rs 1,912.

This C wave has the target of Rs 2,041 and then Rs 2,140. The 200 DMA present at Rs 2,070 will be an interim impediment.

In other words, a cluster of resistances exist between Rs 2,040 and Rs 2,140.

The medium-term outlook is negative though a fall below Rs 1,900 is required to reinforce this assumption. A close above Rs 2,140 will negate this outlook. Traders can short on rallies with a stop at Rs 2,075. Stop for investors would be Rs 1,900.

Tata Steel

Tata Steel staged a minor pullback last week that took it to an intra-week peak of Rs 622. The laboured nature of the pullback and the sell signals in the weekly oscillators herald short-term weakness in the stock.

The short-term resistance for the stock exists at Rs 630. Inability to rally above this level will make the stock move to Rs 567 and then Rs 533 next week.

The band between Rs 560 and Rs 570 can lend medium term support. Investors should not initiate fresh buys if the stock falls below this level. That would pave the way for a fall to Rs 500.


Lokeshwarri S. K