Reliance is one of the heavyweight index stock but its performance post election results has been very disappointing especially after Govt postponed decision on new Gas prices. It touched a high of 1140 on election day but today closed at 998. Here's the technical story of Reliance.
Reliance: The Technical Picture
Reliance stock received a major setback in last week of June when Govt decided to review the Gas price hike decision.
There was a Gap down opening and breakdown below 50 dma. Reliance stock not only broke down below 50 dma but continued with decline all the way to 960. But then thanks to market recovery, Reliance made pullback attempts but both of those pullback attempts failed at 50 dma. The 50 dma seems like stiff resistance for the stock as of now.
Technically, Reliance is very vulnerable and can lead any market correction. The stock can decline all the way down to 200 dma i.e. 920-935 levels where it will become attractive buy.
Should one SHORT?
No. In Bull market, one should never take positional short positions. Reliance is Avoid right now. It will become a good buy near 920-935. Having said all of the above - any recovery in Reliance above 50 dma may see lots of short covering and buying. So always be aware of that.
Reliance Price as of now
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