RIL started the week on a negative note, tumbling 7 per cent on June 15. The counter plunged 13 per cent over the week, conclusively breaking through a key medium-term support level at Rs 2,100. We believe that the stock has reversed lower.
The negative divergence in the weekly oscillator and penetration of the intermediate-term up trend line supports the reversal. The immediate key support for the stock is at Rs 1,975 (a floor of gap occurred this point in mid May) and Rs 1,850 in the days ahead.
If the stock fails to sustain above Rs 1,975, it can dive to the next support level or even lower. Fresh long positions are recommended only on a positive close above Rs 2,200, with target at Rs 2,350.
Text & Images: Business Line