Last week, the stock of State Bank of India failed to move past a key resistance at Rs.247 and fell 1.6 per cent. The short-term trend continues to be down since its early August high of Rs.291.
Only an emphatic breakthrough of the trend-deciding level of Rs.260 will alter the downtrend and take the stock northwards to Rs.270 or Rs.280 levels in the short term. To alter the stock’s medium-term downtrend, it needs to decisively break an important resistance level at Rs.290.
The stock trades well below 200-day moving averages. As the stock lacks strength and the indicators on the daily and weekly charts show signs of weakness, traders with a short-term view can consider initiating fresh short positions on the stock, while maintaining stop-loss at Rs.245.
A strong fall below Rs.230 can drag the stock down to Rs.220 in the short term. The next key support for the stock is at Rs.210.