Can Reliance Industries' stock hit Rs 3,000 mark? Here's what charts say

Reliance Industries (RIL) has been among the best performing stocks since the markets hit their low in March 2020 - rising from around Rs 875 levels then to Rs 2,315 now. The rally has been fuelled by the company's ability to attract marquee global investors - first in its telecom business vertical, Jio Platforms, and now in the retail arm. Most brokerages have been bullish on the stock and see more headroom given the debt free status of the company and the possible stake sale in the retail venture.

"We see capital allocation, execution and de-gearing as key to the next leg of stock outperformance. With industry consolidtion picking up pace in telecom, retail and global refining, we see RIL emerging stronger post Covid-19 and margins should surprise as pricing power rises," wrote Mayank Maheshwari and Akash Mehta of Morgan Stanley in a September 9 co-authored note.

"The deal (with SilverLake) is the company's first divestment within the retail segment, which is currently wholly owned by RIL. With this deal, the Indian conglomerate has now established an enterprise value for its retail segment, which sets the stage for further stake sales within the segment," wrote Sweta Patodia and Vikas Halan of Moody's in a September 10 note. 

Here's what charts indicate for the stock.

The monthly chart clearly indicates a breakout on a 'negative divergence'. A negative divergence occurs when the underlying security moves to a new high, but the indicator fails to record a new high and forms a lower high. For momentum indicators, a negative divergence shows slowing upside momentum that can sometimes foreshadow a bearish reversal

The stock did witness selling pressure last week, but found more buying come in at lower levels, which was accompanied with volume. This suggests the overall upside momentum is likely to stay intact and corrective moves, if any, will see accumulation in the range of Rs 2,000 to Rs 1,800. The stock looks strong from a medium-to-long term view and indicates a rally towards the Rs 3,000 mark over the next few months. CLICK HERE FOR THE CHART

As per the weekly chart, the counter looks highly bullish till Rs 2000 level is defended. It also indicates a substantial rally is likely to emerge once the counter crosses a minor hurdle of Rs 2,520 levels.

The strength indicator, the Relative Strength Index is trading in an overbought condition on all chart scales. But the price is not showing any negative sentiment. One can see minor weakness that may see the stock dip below Rs 2,200, which, as mentioned above, is likely to see buying momentum and an aggressive accumulation.