Taking support at around Rs.260, the stock of SBI surged 9.7 per cent last week. With this rally, it has decisively surpassed its 50- and 200-day moving averages. There has been an increase in daily volume over the past five trading sessions.
The daily relative strength index is on the brink of entering the bullish zone. However, the stock faces a key resistance at the Rs.290 level. An emphatic breakthrough of this level is needed to strengthen the stock’s on-going up move. Subsequent resistances are at Rs.300 and Rs.310.
Traders with a short-term outlook can go long on a break above Rs.290 with a stop-loss at Rs.282. But inability to breach the resistance will pull the stock down to Rs.280 and then to Rs.270 .
Investors with a medium-term perspective can also buy the stock on a break above Rs.290 levels with a stop-loss at the level of Rs.270.
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