Reliance Infra, Reliance Power: Trading strategies for ADAG stocks

Shares of Reliance Infrastructure -- the Anil Dhirubhai Ambani Group (ADAG) company -- touched 5 per cent upper circuit at Rs 73.3 apiece after its Board of Directors on Sunday approved raising of up to Rs 550.56 crore from its promoter, the Anil Ambani group and from Varde Investment.

The company said it will make a preferential allotment of up to 88.8 million equity shares and/or warrants convertible into equivalent number of shares, to promoter group and VFSI Holdings Pte. Limited, an affiliate of Värde Investment Partners, LP. The funds raised, it added, would be utilised for long term resources, for general corporate purposes, fund future growth and also to reduce the debt of the company.

As per technical charts, the sharp upmove logged on Monday will help the ADAG stocks to show positive reversals. Consider this: Despite a 50 per cent gain in May, Reliance Infrastructure continues to carry positive momentum. Now, the news of raising fund is likely to act as a positive catalyst in the near-term.

Here is how Reliance Infra and other Group stocks look on technical charts:

Reliance Infrastructure Ltd (RELINFRA)

Likely target: Rs 78 and Rs 85

Upside potential: 8% - 18%

Despite a sharp up move in the month of May, the stock is expected to rally further with the same optimism. The overall trend will remain bullish till it defends the support of Rs 60 and and Rs 50 levels, as per the daily chart. On the higher side, any decisive close above Rs 72-mark is expected to see an upside towards Rs 78 and Rs 85 levels, as per the daily chart. CLICK HERE FOR THE CHART
 
Reliance Capital Ltd (RELCAPITAL)  

Likely target: Rs 20 and Rs 22

Upside potential: 23% - 35%

The stock has managed to conquer the resistance of Rs 14-mark on the back of heavy volumes. The price action is exhibiting strength despite the stock being in the overbought category of the Relative Strength Index (RSI). The stock may rally towards Rs 20 and Rs 22 levels in the upcoming sessions if the support of Rs 11 is defended, as per the daily chart. CLICK HERE FOR THE CHART
 
Reliance Power (RPOWER)

Upside potential: Rs 14 and Rs 16

Likely target: 25% - 40%

With the formation of "Inverse Head and Shoulder" pattern, the stock has seen a breakout supported by heavy volumes. The positive sentiment continues to scale higher highs, as per the weekly chart. Going forward, as long as the stock is able to defend the support of Rs 7, the upside bias may move in the direction of Rs 14 and Rs 16 levels. CLICK HERE FOR THE CHART
 
Reliance Communications Ltd (RCOM)

Likely target: Rs 3.20 and 3.50

Upside potential: 10% and 15%  

The counter has been witnessing firm bullish sentiment, with gap-up closes, for the past seven sessions. The sentiment may remain intact if it firmly holds the support of Rs 2.30 levels on a closing basis. If that happens, the upside bias may see a rally towards Rs 3.20 and 3.50 levels as the stock is witnessing bullish bias even in the overbought category of RSI. CLICK HERE FOR THE CHART