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Reliance Industries (RIL) stock has plunged nearly 22 per cent from its record high of Rs 1,616.60 registered in July 2024. The current fall in the stock price has come amid a 1:1 bonus share issue by the company. The stock at Rs 1,285 levels now trades ex-bonus.
Historically, in the last one decade (starting October 2015 after the stock conquered its 100-MMA (Monthly Moving Average), barring the continuous over 50 per cent fall during the Covid-19 pandemic related sell-off, RIL stock on an average has corrected around 21 per cent from its then peak on the monthly scale.
Technical chart shows, RIL has cracked almost 21 per cent from its December 2022 high of Rs 1,258 to a low of Rs 995 in March 2023. Similarly, the stock had tanked 20 per cent from its April 2022 high of Rs 1,300 to a low of Rs 1,076 in July 2022. Further back, in the period September 2020 to January 2021, the RIL stock corrected by nearly 23 per cent.
Given the overall tepid trend in the Indian stock market and RIL background, is the stock a good buy at current levels or is more pain in store? ALSO READ: Delhivery, RBL Bank: Trading guide for stocks where MFs raised stake in Q2
Here's what the technical chart suggests:
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Reliance
Current Price: 1,285
Downside Risk: 9%
Upside Potential: 9.7%
Support: Rs 1,200; Rs 1,187; Rs 1,170
Resistance: Rs 1,295; Rs 1,330; Rs 1,352; Rs 1,387
On the daily scale, RIL stock is seen trading below its key moving averages which is a negative sign. The 20-DMA (Daily Moving Average) at Rs 1,330. Further, on the weekly scale, RIL is seen trading below its 100-WMA (Weekly Moving Average), which stands at Rs 1,295, for the second straight week. Thus, the Rs 1,295 - Rs 1,330 zone is likely to act as an immediate resistance zone for the RIL stock in the near-term.
On the downside, the stock seems on course to test the 100-WMA which stands Rs 1,187. The 100-WMA also coincides with the super trend line support on the monthly scale and the 50-MMA (Monthly Moving Average) at Rs 1,200 and Rs 1,170. Thus, suggesting a possibility of strong support in the Rs 1,170 - Rs 1,200 zone. This, however, implies a downside risk of 9 per cent for RIL from present levels. CLICK HERE FOR THE CHART
On the positive front, in case, RIL stock is able to conquer the resistance zone, the stock can potentially bounce back t Rs 1,410 levels; with interim resistance visible at Rs 1,352 and Rs 1,387 levels.
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