Reliance stock has been suffering from underperformance for long long time. It touched 1140 in May 2009 and has not crossed above it since then. Even after Modi Govt came to power - Reliance touched 1140 and pulled back. But are things about to change now?
There has been huge trading interest in Reliance in last few weeks and stock from lows of 810 has rallied to 920-940 and stock now stands at big trading decision point?
Decision: Should the stock cross the barrier?
Here's the daily chart
As you can see in the chart above: Reliance stock is trading just below 200 dma and horizontal line of resistance of 940. If Emerging market bullishness continues, it might help the stock cross over 940 and considering huge underperformance over last many many years: a spike to 1140 cannot be ruled out. Having said this: the stock is still trading below 940 and can just once again slip back to 830. So, keep an eye and let the stock price action confirm the turnaround thesis before you jump on to a trading opportunity.
The real turnaround in Reliance will come only above 1140. Only above 1140 - the stock will become Investment Buy
All rallies to 1140 right now will be treated as trading bounce.
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