Reliance has made a big move in last few days from levels of 960 to 1130. Now, this seems to have generated lots of bullish interest in the stock. The Big question: What Next?
Well technically, Reliance is setup for decline to 920 first before delivering a rally to 1140. Here's why
Reliance Daily Chart
Reliance is very close to the resistance of 50 dma/ 1040-1050. Reliance formed this resistance when stock broke down (Gap down reaction) below it post Govt announcement on delay in Gas pricing decision. The resistance at 1040-150 would keep the stock's bullish progress in check. Near 1040-1050, the stock seems vulnerable to sharp correction on any profit booking in the market. In that circumstances, the stock can decline to its solid support base of 200 dma and turnaround support level of 920.
Should one Short the Reliance?
No. One should never short in Bull Market. Technically, one should be neutral on the stock near levels of 1040-1050.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers