Synopsis: Reliance Industries Ltd. (RIL) shares have seen a significant downturn, trading at Rs. 1,281 in the current session and down 20% from their all-time high of Rs. 1,608.95 on July 8, 2024. Both short-term and long-term moving averages suggest weakness, as the stock is trading below its 5-day, 20-day, 30-day, 50-day, 100-day, and 200-day averages.
In the current trading session, shares of Reliance Industries Ltd. (RIL), led by billionaire Mukesh Ambani, were observed at Rs. 1,281, marking a considerable decline from their record high of Rs. 1,608.95 reached on July 8, 2024.
This decline represents a 20% drop in value, with the stock delivering a flat year-to-date return, and even recording a minor dip of 1.30%.
From a technical standpoint, RIL shares exhibit weakness across various moving averages.
The stock has fallen below key short- and long-term averages, including the 5-day, 20-day, 30-day, 50-day, 100-day, and 200-day moving averages, indicating a downward momentum.
The Relative Strength Index (RSI) stands at 28.4, moving into oversold territory, which may suggest a potential reversal or stabilization in price.
This technical position aligns with a high beta of 1.2, suggesting significant volatility over the year.
With the stock trading within the Rs. 1,280-1,260 range, analysts note this as a historic support zone where accumulation and stability have been observed.
Ameya Ranadive, Senior Technical Analyst at StoxBox, highlights that the stock's RSI level signals an attractive risk-reward scenario.
Ranadive suggests that investors may consider entering the stock at Rs. 1,280 with a stop loss of Rs. 1,240 and target prices set at Rs. 1,365 and Rs. 1,390.
Jigar S Patel, Senior Manager of Equity Research at Anand Rathi, echoes similar optimism for the stock's recovery potential.
Patel identifies Rs. 1,250 as a support level and Rs. 1,300 as a key resistance point, with a possibility for upward movement toward Rs. 1,375 if the stock breaks through the resistance.
Adding to this analysis, Gaurav Bissa, VP at InCred Equities, noted that RIL has seen pressure after multiple support levels were broken on the daily charts.
However, he emphasizes that the price is nearing its 200-day exponential moving average (200 EMA) on weekly charts, positioned around Rs. 1,180.
This level may act as a foundational support, where further declines could present long-term investors with a buy opportunity, potentially leading to long-term gains with targets above Rs. 1,600.
RIL’s market capitalization has consequently slipped to Rs. 17.30 lakh crore as turnover on the Bombay Stock Exchange (BSE) reached Rs. 18.27 crore, with a trading volume of 1.43 lakh shares in the current session.
The stock has seen a recent trading range between Rs. 1,155.83, the 52-week low, and the Rs. 1,608.95 high, marking a broad spectrum of fluctuation over the year.
In conclusion, Reliance Industries Ltd. (RIL) has undergone notable corrections, with share prices seeing consistent pressure below significant moving averages.
Although the stock is oversold with low RSI values, market analysts remain cautiously optimistic about a rebound, particularly given the key support zones and historical performance in similar circumstances.
Investors may consider a cautious approach, evaluating these support and resistance levels while watching market conditions closely.
Disclaimer: This article provides stock market information for informational purposes only and does not constitute investment advice. Investors are encouraged to consult with a qualified financial advisor before making any investment decisions.
