Reliance Industries shares can hit Rs 3,000, tech charts indicate

As long as the support of Rs 2,400 is defended; the negative sentiment is not going to see any exciting response from market participants. Short-term support exists at Rs 2,580 and Rs. 2,520

Over the weekend, Reliance Industries announced two major acquistions in the renewable energy space. The company at first announced acquisition of REC Solar Holdings (REC Group) from China National Bluestar (Group) Co, through its wholly-owned subsidiary Reliance New Energy Solar for an enterprise value of $771 million.

This was the comapny's first major renewable energy deal, where an equipment manufacturing facility has been acquired. READ MORE

Within hours of announcing acquisition of REC Solar Holdings, Reliance announced on Sunday that its subsidiary will acquire a 40 per cent stake in Sterling & Wilson Solar Ltd through a combination of primary investment, secondary purchase and open offer for around Rs 2,850 crore.

According to the arrangement, Reliance New Energy Solar will first acquire 15 per cent in Sterling & Wilson by way of a preferential allotment of 29.3 million equity shares (equivalent to 15.46 per cent post preferential share capital) at Rs 375 per share. Thereafter, the company will acquire 18.4 million equity shares from SP group company (equivalent to 9.7 per cent post preferential share capital) at a price of Rs 375 per share. Total investment cost for Relaince will be around Rs 1,100 crore. READ MORE

Given the acquisition spree, Reliance Industries has been in focus in trade today, with the stock touching a high of Rs 2,725 in the opening trades, and quoting at Rs 2,695, up 0.9 per cent as of 10:54 AM. Going forward, here's what the charts have to say about the possible near term performance for the stock.

Reliance Industries Ltd (RELIANCE)
Likely target: Rs 3,000
Upside potential:  11%

After conquering the major selling range of Rs 2,400 to Rs 2,300 levels, the shares of Reliance Industries showed gradual upside. This positive move is gaining strength bit by bit and is ready to board strong upward rally. While, the Relative Strength Index (RSI) trades in the overbought category, the stock action is not exhibiting any major weakness. In addition, as long as the 60 value is upheld by RSI, the positive bias is expected to see stock venturing towards uncharted territory of Rs 3,000 levels with aggressive sentiment. 

The medium-term outlook exhibits bullish bias with stock maintaining “Higher High, Higher Low” formation intact, according to the daily chart. Going forward, as long as the support of Rs 2,400 is defended; the negative sentiment is not going to see any exciting response from market participants. The short-term support exists at Rs 2,580 and Rs 2,520 levels.

All the key charts of Reliance Industries clearly indicate a positive sentiment, as the underneath trend stays highly strong. Any weakness may likely see addition of long positions. CLICK HERE FOR THE CHART