Yep! Its Reliance once again – Reliance Industry Share prices are technically in a Uptrend since from March. Share prices have rallied so far from 900 to 1500 and some market participants are wondering what’s going on in the Stock. The Short term Uptrend is clearly visible on 2h and 4h timeframe.
But the recent signs of “over – extension” within the Uptrend and the overall negative market sentiment might spark a Trend Reversal in the stock. Take a look at this Chart Analysis.
Reliance Industries – Short Term Uptrend
Reliance share prices are rallying higher because of speculation over the recent decisions and business activities undertaken by the Management. One of the most cited reasons behind the rally is the business deal that happened between Jio and Facebook. Another important point is the constant measures taken by the company to cut its debt from the Balance sheet. These two factors seem to be influencing the Investor’s behavior so far. In a simple sense, we can say that Uptrend in Reliance is a result of Speculation over the future prospects of Business.
But given the current circumstances and negative market sentiment, the Uptrend might be short-lived. Even the Price behavior is showing the signs of over – extension in the Uptrend – a tendency of price movement to revert back to the mean value after 2 – 3 consequent rallies.
So based on these factors, we can say there are good possibility of Trend Reversal in the Stock. Trend could either reverse into a Range or it might altogether turn into an opposite trend. In either way we can expect some potential trading opportunity in upcoming days.
Hence Traders should keep an eye on the Price Action of Reliance Industries and must avoid taking positions impulsively. Execute trades only if there’s a proper setup with good risk – reward. In case of any strong positive catalyst, we need to change our bias and expectation.
