ITC

ITC is gaining momentum. The initial fall last week found support near Rs.320 and the stock surged 3.6 per cent. Cluster of supports are visible between Rs.323 and Rs.321 which can limit the downside. An immediate break below Rs.321 looks less probable. 

Near-term resistance is at Rs.341, which is likely to be tested this week. A strong break and a decisive close above Rs.341 will increase the bullish momentum. This can then take the stock higher to Rs.350 and Rs.360. 

The break above Rs.341 will also confirm the inverted head and shoulder pattern. Long positions taken a couple of weeks back can be retained with a revised stop-loss at Rs.318 and for the target of Rs.338. 

Investors with a medium-term view can initiate fresh long positions with a stop-loss at Rs.318 for the target of Rs.355. Make use of declines to Rs.325 to accumulate long positions. The bullish outlook will get negated only if the stock falls below Rs.320. This can drag ITC lower to Rs.315 or even lower.