RIL shares slide 7% in a month. What’s lies ahead for India’s largest co by market cap?

Shares of index heavyweight Reliance Industries (RIL) have been falling since July and have tumbled by 7% in the last one month alone. The shares also came under pressure following the company’s Q2 results, wherein it reported a 5% fall in its net profit to Rs 16,563 crore.

On charts, the stock has been in a downtrend after making a peak near the Rs 1,6 10 level and is currently placed below its 200-day exponential moving average (DEMA).

The price went into a consolidation phase in September, following which, a death crossover was witnessed on October 1, when the 10 DEMA crossed the stock’s 20 DEMA from above to below.

The price breached its major support levels in October and has been falling since then with large selling volumes on the daily chart.

“Large-bodied bearish candles are visible on the weekly chart suggesting strong bearish sentiment. The ADX line has turned up on the weekly scale suggesting the strength of the bear trend,” said Chandan Taparia, Senior VP of Equity Derivatives & Technicals, Wealth Management at Motilal Oswal.

The price has halted at its December 2023 breakout levels and Taparia believes that it could now take support from here. Looking at the overall structure, he suggests holding the stock with a stop loss of Rs 1,250.

The stock is under pressure not only on the daily charts but also on its weekly chart. Despite the shorter-term downtrend, the monthly chart shows a potential long-side bias.

This suggests that the stock could present a buying opportunity if it reaches a strong support level, so it’s recommended to accumulate the stock on the upcoming support level,” suggests Ganesh Dongre, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

The upcoming support zone has been identified between the Rs 1,220 and Rs 1,250 levels, which could offer a potential entry point for accumulation.

“We will recommend buying a dip in this stock at the support level of Rs 1,220-1,250 zone with a stop loss of Rs 1,170 for the target price of Rs 1,350 in the upcoming month,” Dongre added.

However, it is also cautioned that this requires patience, awaiting the stock to reach the support zone for an entry point, with a stop loss at Rs 1,170 to manage risk.

Meanwhile, the shares of RIL were trading 0.5% lower at Rs 1,277.70 on the BSE around 12:15 pm on Monday.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)