The stock of State Bank of India (SBI), which was moving in a narrow sideways band between Rs.224 and Rs.232, tumbled 8 per cent in the previous week.
The stock has resumed its medium as well as short-term downtrend. It currently tests a key support at Rs.210. The daily relative strength index is in the oversold territory. Other indicators in the daily chart too hover in the negative terrain.
Moreover, the indicators in the weekly chart also feature in the bearish zone, backing the downtrend. The stock could witness minor corrective up moves. So, traders with a short-term view can make use of the rallies to initiate fresh short position while maintaining a stop-loss at Rs.220.
Continuation of the down move can drag the stock down to the significant long-term base zone between Rs.190 and Rs.200.A decisive rally above Rs.232 is needed to alter the short-term downtrend. Immediate resistance is at Rs.224.