SBI Notes : SBI found its bottom at 1571 & top at 2475, since then as how Nifty has seen a downtrend SBI has followed a similar pattern, however good news unlike Nifty SBI did not retrace completely to 78.6% levels. Thanks to the recent quarterly results and that changed the outlook for the stock.
Before results, SBI was looked upon as a weak stock and people expected it to touch below 1800 levels. However SBI chose to reverse its trend at around 1800 levels and exactly at 1802. Now why we see SBI going to 1800?
If you look at EOD chart, From Oct 11th to Jan 13th SBI tried to attempt around 4 times to get past the 1800 level and then with great effort it broke that level. Hence previous resistance level is now to be considered as a support level.
Fibonacci Retracement Levels
23.6% - 2262
38.2% - 2130
50% - 2023
61.8% - 1916
78.6% - 1765
Connecting 1571 & 2475 on charts, we can see that SBI did not reverse close to 78.6% but well before that, usually stocks which find support level reverse atleast by 2 points greater than the previous level. i.e. if previous level of resistance was noted at 1800, we can see that 1802 acted as support and SBI reversed
SBI is one stock which strictly does not follow fibonacci levels all the time, in the recent run 2023 was found to be a major support level which is 50% on fibonacci levels, however it chose to go further below upto 1974. Now why 1974, why not above or below that?
On May 23rd SBI made a low of 1920 & a high of 2104 on May 29th, connecting these levels, we get 78.6% retracement at 1970
On Jan 30th, 1970 level has acted as support and closed that day at 1972 level. Market has taken just 2 points above that level and made recent support level at 1974
Even though critical level is at 2023, SBI chose to slightly go down to 1974 and then climbed back again.
SBI has recently found major support at 2130 level on Jun 8th, to be precise around 2131.5 it reversed back forming a hammer pattern on charts
As far as 2130 level holds current trend for SBI is positive and from short term perspective 2023 to 1974 levels act as biggest support zone
SBI Intraday Level - Analysis - Jun 8th '12
SBI during the initial hours made a low of 2135, however connecting its day high 2191 & low 2135, it managed to climb only upto 2161 to 2164 levels which is 50% retracement level on charts and then we could clearly see a bull & a bear fight
Temporarily bears won the fight and pulled it to 2131, however on EOD chart, SBI has very major support at 2130 which is 38.2% retracement level, hence SBI reversed a point above to 2130 and this time all the shorts were covered and we could see fresh buying happening
This is the time that bulls have overtaken and as a clear sign we could see a head and shoulder pattern on line chart at 2131 and rallied to 23.6% level i.e. close to 2177 and then dropped to 50% level around 2161 - 2164 and then rallied further up to 2191
Note : On EOD charts SBI has major resistance at 2190, however if Nifty holds above 5080 and trades in 5100 to 5120 levels then we can see SBI crossing 2200 levels to even 2230 - 2260 in next couple of trading sessions.
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