In the second half of 2024, Reliance Industries Ltd.’s (RIL) stock went negative. In just six months, the large-cap stock that most individual investors own has lost 12% of its value. Actually, it is 20% lower than when it peaked on July 8, 2024, at Rs 1608.95. The market titan is currently trading below all of its moving averages, both short—and long-term. The stock has been quite volatile, with a beta of 1.2 during the past year.
“Reliance Industries is currently trading at Rs 1,288, indicating a 20% decline from its 52-week high,” stated Ameya Ranadive, Chartered Market Technician, CFTe, Senior Technical Analyst, StoxBox [sic]. The stock has found strong support near the Rs 1,200 mark, which corresponds to the bottom limit of its upward-trending channel that has remained unbroken since 2020. The zone’s previous function has reaffirmed its long-term bullish trajectory as a solid foundation.
Technically speaking, the Relative Strength Index (RSI) has shown early indications of momentum rising as it has rebounded to 46 from oversold levels. Stronger participation and a rally might result in an apparent breakthrough over the Rs 1,330 barrier, which is also its 50-day exponential moving average. The stock is anticipated to advance towards goals of Rs 1,380–1,450 once this resistance is broken. Reliance provides a substantial buy-on-dips opportunity and an appealing risk-reward ratio at current prices. To protect against downside risks, investors may consider buying the stock with a stop-loss below 1,200. In the immediate future, a sustained rise above? 1,330 may serve as a significant stimulus for more gains, Ranadive continued.
Motilal Oswal anticipates that RIL’s major sectors will continue to see strong profit outlooks. Reliance Jio is expected to be the main growth driver (more frequent pricing rises, market share gains, and FWA ramp-up). “Despite comparable or better EBITDA growth over the last few years, Reliance Industries (RIL) has outperformed the larger benchmarks, Bharti, and organised retail rivals. A lack of FCF generation and increased capital expenditures in Retail and RJio were the main causes of RIL’s poor performance. However, we think that the spending has probably peaked, and we anticipate that RIL will produce INR1t in total FCF during FY24–27. Since RIL is now trading around our bear case values (1:10 risk-reward skew), we think the risk-reward is appealing,” Motilal Oswal stated. The broking has set a price objective of Rs 1,580 for the stock.
However, Manish Shah, a SEBI Registered Investment Advisor, is pessimistic about the stock’s future. “Reliance is currently experiencing an intermediate-term decline. The price has lost its upward momentum. The rally from the low of Rs 1212 is a dead cat bounce. The price action suggests the underlying weakness. Over the following weeks, the price may decrease to Rs 1200 and then to Rs 1150. The primary support is around the Rs 1130–1150 range. For now, Reliance investors should adopt a wait-and-watch strategy, Shah advised. During the current session, the market heavyweight dropped 1% to Rs 1,281.85 on the BSE. Today, the company’s market capitalisation fell to Rs 17.34 lakh crore. A total of Rs 43.16 crore worth of the company’s 3.35 lakh shares were exchanged on the BSE.
