reliance share price: Golden cross for RIL; last time it occurred, the stock rose 15%

The stock of energy-to-telecom behemoth Reliance Industries (RIL) recorded a “golden cross” on technical charts on Monday, which further strengthens the positive view on the counter.

A golden cross forms on the technical chart when the 50-day short-term average of the stock or an index crosses above its 200-day moving average. The golden cross indicates a bullish setup, when the crossover is accompanied by high trading volumes.

After witnessing a short rally from panic low of Rs 867, registered on March 23, this stock has climbed 87 per cent to hit its life-time high of Rs 1,626.70 on June 15.

Commenting on the moving averages, Mazhar Mohammad, Chief Strategist-Technical Research & Trading Advisory, Chartviewindia, said at this juncture, some of the moving averages may generate positive crossovers, but they will not add much value to make a forecast as the scrip is already driven up on the ‘deal buzz’.”

He said the current golden crossover may make a point to say that the underlying intermediate trend is strengthening. “But the 100-day moving average is still below 200-day MA, highlighting imperfections in the present uptrend. When the trend is perfect, smaller averages trade above the longer-term moving averages,” he said.

Billionaire Mukesh Ambani-led company has raised a record Rs 1.04 lakh crore in less than eight weeks from the sale of minority stakes in its digital unit Jio Platforms to marquee investors.

On Saturday evening, RIL announced the sale of 0.93 per cent stake in Jio Platforms to global investment firm TPG for Rs 4,546.80 crore and 0.39 per cent stake to private equity firm L Catterton for Rs 1,894.50 crore.

With these, RIL has now sold 22.38 per cent of Jio Platforms to investors, including Facebook Inc, securing Rs 104,326.95 crore in less than eight weeks.

“Technically speaking, better trading opportunity on this counter shall be available on any correction close to Rs 1,400 with a stop loss below Rs 1,390 on a closing basis. Till then, traders will be better off by avoiding it,” Mazhar added.

Earlier, when the counter had made the golden cross on October 23 last year, the scrip rallied over 15 per cent in less than two months. Shares of the company on Monday closed 1.42 per cent higher at Rs 1,611, while the benchmark BSE Sensex settled 1.63 per cent down at 33,228.

Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services said: “A golden cross usually lays some ground for a fresh resumption of any upmove even if one sees some short-term consolidation in price.”

“The RIL stock has multiple resistances between Rs 1,605 and Rs 1,618. If the stock attempts to move past Rs 1,618 level, this time, it would be its fifth attempt to do so. Any move beyond Rs 1,605-1,618 zone will propel the stock to a new high,” he added.

[Source – Economic Times]


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