Reliance Industries shares show signs of a technical turnaround as investors watch for the Jio Platforms IPO. The stock moved above its 10-day simple moving average for the first time since early September. Anand James said, "the resistance could limit the immediate upside" as the stock nears a key test.
Synopsis
Reliance Industries shares are showing early signs of a technical turnaround as investor attention remains focused on the planned Jio Platforms IPO. The stock has moved above its 10-day simple moving average for consecutive sessions for the first time since early September, while a broadening-wedge pattern is nearing an upside breakout. However, the recovery faces a key test near ₹1,220. Anand James, Chief Market Strategist at Geojit Investments, said the resistance could limit the immediate upside even as momentum indicators point to a maturing reversal setup.
Reliance Industries shares are showing early signs of a technical turnaround as investor attention remains focused on the planned Jio Platforms IPO. The stock has moved above its 10-day simple moving average for consecutive sessions for the first time since early September, while a broadening-wedge pattern is nearing an upside breakout.
However, the recovery faces a key test near ₹1,220. Anand James, Chief Market Strategist at Geojit Investments, said the resistance could limit the immediate upside even as momentum indicators point to a maturing reversal setup.
Edited excerpts from a chat:
The Nifty has recovered above 23,000 after a prolonged correction. Is this a genuine trend reversal or merely a technical pullback within a broader downtrend? What levels would confirm a durable reversal?
We have seen plenty of relief rallies within the broader downtrend in the last few months, only to see them all hammered down. This one, though, with a break above 20 day SMA, for the first time since August is pointing to the start of a sustainable uptrend that initially aims at 23600. We will however face mean reversion threats once in the 23200 vicinity. But as long as dips do not result in a close below 22850, we will remain hopeful of continuation of uptrend.
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IT stocks moved from being among the market’s worst performers to leading the rebound, with Nifty IT gaining sharply over three to four. Is this a sustainable sector rotation or a short-covering rally after heavy underperformance?
The sharp rebound in IT appears to be a combination of short covering and improving underlying momentum, though the sector may need to consolidate before sustainable leadership emerges. The Nifty IT Index has rallied swiftly towards the crucial 31,900-31,950 horizontal resistance zone, with the move backed by strong volumes. However, the index is now overbought on the daily timeframe, increasing the possibility of near-term cooling off.
Derivative positioning also suggests some caution. While around 60% of IT stock futures witnessed short covering on a week-on-week basis, nearly 60% saw long unwinding on Friday, indicating traders are booking profits after the sharp rebound. Heavyweights such as TCS, Infosys, Tech Mahindra and Wipro have also entered overbought territory, which could limit immediate upside.
Therefore, some consolidation around current levels appears likely. A decisive breakout above 31,900-31,950 after consolidation would strengthen the case for genuine sector rotation and could open the way towards 35,000.
How do you read the charts of TCS, HCLTech, Infosys, Wipro and Tech Mahindra after this week’s rally? Which of these stocks has genuinely broken out, and which is only witnessing a relief bounce?
The steepness of the rise suggests that they have all broken out, though they are all at different stages, in terms of the hurdles. While Tech Mahindra has exploded past its August peak, TCS and HCL Tech just tested the same, while others have some more distance to go before this peak is overcome.
Reliance Industries shares are in focus amid Jio Platforms IPO. What is the technical setup in RIL?
The patterns indeed point to a reversal set up maturing, with a broadening wedge on the verge of signalling an upside breakout also followed by consecutive days of close above the 10 day SMA, for the first time since early September. While some oscillators have signalled support with a push above centre line, some others have straightened too fast suggesting that the horizontal resistance in the 1220 region might hold off for a while.
Give us your top ideas of the week.
ACC (LTP: 1187)
View: Buy
Target: 1250
SL: 1145
ACC is showing early signs of a rebound after a prolonged decline. The stock has reclaimed its 20-DMA and triggered a PSAR breakout, while a move above the nearby Supertrend level could further strengthen the recovery. Momentum is also improving, with the MACD generating a bullish signal crossover and the RSI recovering sharply from oversold territory to around 46. The latest rise is supported by a noticeable volume breakout, indicating renewed buying interest.
The combination of improving momentum, rising participation and price reclaiming near-term trend indicators suggests that the recent lows may provide a base for a pullback rally. Sustaining above 1145 keeps the recovery setup intact and could pave the way for a move towards 1250 over the next few weeks.
VAIBHAVGBL (LTP: 210)
View: Buy
Target: 230
SL: 202
Vaibhav Global is showing signs of a bullish reversal after bouncing from its weekly Supertrend support with a strong reversal candle. The stock has subsequently broken above a declining trendline and reclaimed its 20-DMA, with the move backed by strong volumes, indicating renewed buying interest. A PSAR breakout and flattening daily Supertrend further point to an improving short-term trend.
On the weekly chart, the MACD histogram is showing exhaustion, suggesting that the recent selling pressure is losing momentum. The combination of strong support, improving price structure and increased volumes strengthens the case for a recovery over the next few weeks. As long as 202 holds, the positive setup remains intact, with a potential move towards 230.
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(You can now subscribe to our ETMarkets WhatsApp channel)
(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)
Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today.
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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