Reliance is turning around slowly but beautifully. The chart is telling one thing very clearly: Large investors are changing their view about the stock. Hence, I was not at all surprised with the news that CLSA has added Reliance to their portfolio.
Reliance shares jump 1.2% as CLSA adds stock to AxJ portfolio https://t.co/oMYkawzMKL
— Business Line (@businessline) January 8, 2016
As a matter of fact: I have been talking about this changing perception about Reliance for quite some time now. Here's why?
- Reliance made a huge gap-up move on Oct 19, 2015, after the earnings report.
- Post that Gap up move, Reliance did a sideways correction and filled the gap by Nov 18 2015. It found support at 200 dma and bounced with good intensity
- Reliance then again corrected and pulled back to 200 dma by Dec 09 2015 but only to bounce again. Reliance formed a double dip support at 200 dma and has bounced 12% in last 30 days. That's a huge for stock that is just turning around and doing so in current global chaotic environment
What does this mean?
Reliance needs a little bit more effort to acquire momentum. One more rally and close above 1040-1060 and Reliance will acquire that status. Institutional investors and performance chasing money will start running behind the stock. This will be great news for the Indian bull market. It needs a leader. Can Reliance be that one? The signs are very encouraging.
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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