Reliance Industries Ltd (RIL) continued its correction after failing to cross 50 day SMA at 1510, and has lost nearly 100 points in last 3 trading sessions. Investors will observe that Reliance stock has been correcting rapidly but gaining slowly in the last 2 months. That’s because the stock is in sell zone, just like Nifty, and rise is slower and fall is faster. The lower supports are currently at 1400 and 1360. The chart is looking weak and Reliance stock has to come above its 50 day SMA to become bullish again, and that will probably coincide with Nifty index also coming into a buy zone.
Investors can use these corrections to accumulate the stock. But Traders should avoid any new long positions currently. Above 1500, fresh long positions can be created for target 1550-1560.
Reliance Industries (RIL) closed at 1485. The stock had a sharp correction in Jan 2020 of 250 points (from 1615 to 1365), after making triple top at 1600, which as a dangerous setup, with a probability for sharp correction, and it played out exactly that way.But the stock has bounced 140 points back till 1505 in Feb 2020.
The current upside target is 1520, and there is a strong resistance at 1525. Above 1525, the target will be 1600. Above 1620, there will be a fresh breakout, with target of 1750.
As long as Reliance stock is below 1525, there will be a tendency to go down. Therefore, Traders should create new long positions above 1525. Investors can buy at all levels between 1000 and 1500 for new lifetime highs.
As always, the path of Reliance and Nifty index are linked, and any major rally in Reliance will also give a rally in Nifty, and vice versa.
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Reliance Industries Ltd (RIL) is the top weight stock in Nifty50 index. Reliance had a sharp correction after declaring best ever quarterly results on 19 Jan 2020. That correction also impacted Nifty, but this week saw good recovery in Reliance from oversold levels, and it also helped in recovery of Nifty50 index.
One of the technical reasons for the sharp correction in Reliance (RIL) stock is that it made a triple top at 1600 and that was a strong bearish setup with significant penalty. Most stocks would have corrected a lot more than Reliance on such a setup.
This week, Reliance recovered from a low of 1363 to a high of 1467. The 50 day SMA is at 1525, and 10 day SMA is at 1434. Today Reliance stock has closed at 1432. We can expect the Reliance (RIL) stock to continue recovery till 1480-1500 levels.
A retest of 1400 level is also possible in the coming week, before moving up towards 1480-1500 level. Traders can stay long with 1390 as stop loss. 1363 is the absolute stop loss on all long trades. However, around 1500 level, there will be significant resistance or selling pressure.
Please note that below 1363, new downside till 1300-1260 will open up immediately. Our Reliance Stock Trading Strategy is to stay long above 1363 for target of 1480 and 1500.
If you trade Reliance stock in a larger way, either in shares or futures, please contact us for partnership opportunities. This is our long term core portfolio stock, which has given us consistent gains. Thanks.