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Technical View on some Large Caps

Sunday, June 24, 2007

Infosys

Infosys could not move past the previous week`s close and slipped below the 50 DMA again. We had indicated that the move since June could be the C wave of a flat.

This wave could have terminated around the first target of Rs 2,041. In this case the stock could move lower towards the Rs 1,900 support again.

A fall below Rs 1,900 will usher in the third part of the move that began from the February high of Rs 2,400. This move can take the stock to a low of Rs 1,650. Investors should contemplate fresh entry only if the stock closes above Rs 2,140

Tata Steel

The outlook for Tata Steel remains unaltered for the short as well as medium term.

The short-term trend is down since the peak of Rs 669. This move can launch in to its third leg that gives the downward targets of Rs 559 or Rs 524. A fall below Rs 580 would confirm this possibility.

The stock will face resistance next week from Rs 625 and then from Rs 635. Struggle to move past Rs 625 should be a cue for traders to play short with a stop at Rs 640.

Close above Rs 635 will mitigate the bearish short-term outlook.

SBIN

SBI made a very strong move last week, recording a weekly gain of 10 per cent.

The stock rose past our second short-term target to an intra-week high of Rs 1,467. This move could be the fifth part of the up-move that began in March 2007.

The targets for this fifth wave are Rs 1,409 and then Rs 1,490.

If we consider an expanded picture and project the target for this third wave from July 2006 low, the next target would be Rs 1,539. Investors can hold the stock with a stop at Rs 1,350. The stock could test Rs 1,500 in the immediate term.

Reliance

Reliance continues to be in an indecisive phase. The reversal from Rs 1,749 keeps the short-term outlook negative and the stock can move lower to Rs 1,656 and then to Rs 1,598. The 50-DMA positioned at Rs 1,635 will lend support in the near term. The momentum indicators in the weekly chart are also pointing towards weakness in the short-term.

But the medium-term outlook will turn negative only if the stock falls below Rs 1,580. Investors can hold the stock with a stop at Rs 1,570. The completion of a five-wave move from March low warrants a cautious approach at this stage.

ONGC

ONGC moved up last week to record a gain of 3 per cent. It has, however, not moved beyond the medium-term resistance at Rs 935. The oscillators in the weekly chart continue to be weak. Failure to move past this level can drag the stock lower to Rs 840 again. Conversely, a move past Rs 935 will clear the way for another spurt towards Rs 1,000.

We advocate caution in this counter till the stock moves well above Rs 935. Investors can continue to hold the stock with a stop at Rs 840. Traders can play short on failure to cross Rs 935.

Posted by FR at 10:25 PM  

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IMPORTANT DISCLAIMER

Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.