How to trade RIL stock post Q2 results? All eyes on this long-term MA

As traders await bonus share record date announcement; technical chart shows that Reliance stock has strong support at Rs 2,640 its 20-MMA - a key moving average the stock has held since June 2023.

Reliance Industries (RIL) stock has been on investors' radar for more than a month now after the company's chairman and managing director Mukesh Ambani announced a 1:1 bonus issue. The company said it will be allotting the bonus equity shares as an early Diwali gift to its shareholders.

Incidentally, RIL stock has declined 10 per cent post announcing the liberal bonus share issue. This will be Reliance's first bonus issue in the last seven years and overall the sixth bonus issue till date.

The overall trend of RIL stock has been negative for the last four months with the stock down 13 per cent since the start of July. In the same period, the NSE Nifty 50 index has gained 4.5 per cent. 

In trades today post the disappointing Q2 financial performance, RIL was down nearly 1 per cent at Rs 2,722 levels. Whereas, the NSE Nifty 50 index was down 0.3 per cent around 25,060 levels.

On the earnings front, RIL missed brokerages forecast for the sixth quarter in a row as per Bloomberg. The Mukesh Ambani-led oil-to-telecom conglomerate posted a 4.8 per cent year-on-year (YoY) decline in consolidated profit at Rs 16,563 crore for Q2FY25. The company's consolidated revenue was marginally lower at Rs 2.31 trillion.

What should be your trading strategy in RIL stock post Q2 numbers? Is RIL a good idea at present levels? Here's what the technical charts suggest.

Reliance Industries (RIL)

Current Price: Rs 2,722

Downside Risk: 3%

Support: Rs 2,640

Resistance: Rs 2,845; Rs 2,900

Amid the current downturn, RIL stock is seen trading below the key moving averages on the daily time-frame, this suggests a negative bias in the near-term. Further, the stock has given a fresh downward breakout on the weekly chart - which can weigh against the bulls. 

The only silver lining for RIL stock remains the key support at Rs 2,640 - the key 20-MMA (Monthly Moving Average) - a level the stock has successfully sustained since June 2023. As long as this support holds, RIL can attempt a short-term pullback. 

Having said that, the weak set-up on the daily and weekly charts suggests that any pullback from present levels could be limited to Rs 2,900 levels, with interim resistance seen at Rs 2,845. Only, break and sustained trade above Rs 2,900 can trigger a sudden upward spike at the counter. CLICK HERE FOR THE CHART