Today’s trade setup is purely technical analysis on Reliance Industries. Looking at Reliance daily chart we see stock has previously taken support near 700 level, However this support may not give immediate rebound, but consolidate first and then rebound. Chart suggest we are already in consolidation near 700 level, if we switch to weekly chart we see current price action is just taking support at 100 EMA (Exponential Moving Average). Also on carefully watching daily chart you can spot a bullish divergence on RSI (Indicator is pointing higher whereas price action is lower), hence a possibility of pullback. Another confirmation that boosted our confidence on trade was open interest data on Reliance January Future contract. On open interest front, we have seen more than 7% jump in open interest, this may be long positions build up. Even we have seen bullish divergence on weekly chart of NSE Defty index, this Defty index is nifty in form of dollar, i.e dollar weighted index. So there is probability that bounce on major indices is near, hence reliance would be out-performer in that rebound. We will recommend traders to take advantage of this move using Reliance futures January contract, hence Buy Reliance Future near 706 to 709 level for targets as 735 and then 742 level. It is highly recommended to place stop loss just below 695 level.
Traders must stay extremely alert as we are taking trade against the trend.
How can you decide exact tops and bottoms in technical analysis. i have read somewhere finding tops and bottoms is just impossible. What is the reason man your analysis on each and every stock works so perfectly. Today I have booked profit in reliance future bought at 722 on Tuesday and today sold at 752.:) I am also interested in technical analysis course. kindly contact.
Bhaveek Patel says
Sir, we are not picking any tops or bottoms, its just simple technical analysis which we follow in every trade. Also that’s really nice to hear traders are getting profit. If you wish to learn technical analysis, then do call us at +91 – 99 70 77 77 89.
Is it feasible to short sell reliance future near 750 level, if yes what should be target and stop levels. reply soon.
Bhaveek Patel says
Vihang, You can enter short on reliance future near 755 level for target of 735 and stop loss at 765. We are bearish on nifty future for next week, European markets are still uncertain as Standard & Poor’s (S&P) has warned a dozen of Euro zone economies for possible downgrade. So stay extremely cautious and watch news for updates.