RELIANCE Short. Trying to get back into the long term channel.
Reliance is moving in a cyclical pattern since it made ATH. What must be done? I'll answer few of the queries regarding this stock.
From 2009 till 2017, this stock was flat, trading inside a horizontal channel (not visible in the chart). After 8 years, it made a move, and from 2017 till 2020 it followed an ascending channel (shown in the chart). In 2020, it broke this channel twice on both sides. Currently, after making the exceptional up-move, due to continues news flow (and excess liquidity, of-course), it has been testing and bouncing form the upper-band of the long term ascending channel. It has tried twice to break and get inside the channel. Rest of the things, the stock itself is telling the story.
Long Term View:
For all those who missed and waiting to enter for long term investment, the best price and time will be when it will test the lower band of the ascending channel. Will that happen? In my opinion, yes, it will break the upper band and come inside the channel when it will test it again for the third time. Generally (not always true), any support or resistance is broken on the odd attempt. This is an ideal scenario, when there is no new flow, else it might again bounce from the upper band of the channel.
Short Term View:
In short term (4-12 weeks), this seems bearish, not only because of all the reasons I explained above, but also because of the depleting RSI on the weekly time frame. The exuberant mood has pushed it to trade at current level, but we know everything gets normalized with time.
Very Short Term View:
It should come to 2005, if the weekly candle closes below 2070 this week. The two recent downfall, and the Fibonacci extension suggest that 2000 level shall be tested in 1-3 weeks, if that breaks, then 1960-80 (the variation is because of unknown time factor) will act as a support (upper band of ascending channel), if that also breaks, then 1930 will act as a support. This short term idea shall be considered invalidated, if weekly candle closes above 2120.
Disclaimer: The information provided herein is for educational purpose. Please consult your financial advisor before making any decision.
If you like the idea, be generous to like it, and share it with others. Comments and Criticism are welcome.
From 2009 till 2017, this stock was flat, trading inside a horizontal channel (not visible in the chart). After 8 years, it made a move, and from 2017 till 2020 it followed an ascending channel (shown in the chart). In 2020, it broke this channel twice on both sides. Currently, after making the exceptional up-move, due to continues news flow (and excess liquidity, of-course), it has been testing and bouncing form the upper-band of the long term ascending channel. It has tried twice to break and get inside the channel. Rest of the things, the stock itself is telling the story.
Long Term View:
For all those who missed and waiting to enter for long term investment, the best price and time will be when it will test the lower band of the ascending channel. Will that happen? In my opinion, yes, it will break the upper band and come inside the channel when it will test it again for the third time. Generally (not always true), any support or resistance is broken on the odd attempt. This is an ideal scenario, when there is no new flow, else it might again bounce from the upper band of the channel.
Short Term View:
In short term (4-12 weeks), this seems bearish, not only because of all the reasons I explained above, but also because of the depleting RSI on the weekly time frame. The exuberant mood has pushed it to trade at current level, but we know everything gets normalized with time.
Very Short Term View:
It should come to 2005, if the weekly candle closes below 2070 this week. The two recent downfall, and the Fibonacci extension suggest that 2000 level shall be tested in 1-3 weeks, if that breaks, then 1960-80 (the variation is because of unknown time factor) will act as a support (upper band of ascending channel), if that also breaks, then 1930 will act as a support. This short term idea shall be considered invalidated, if weekly candle closes above 2120.
Disclaimer: The information provided herein is for educational purpose. Please consult your financial advisor before making any decision.
If you like the idea, be generous to like it, and share it with others. Comments and Criticism are welcome.
Comment:
Regarding Very Short Term View, again the news flow has created an upward movement. Tomorrow's close, weekly close will be looked. Will update regrading this tomorrow.
Comment:
Price is back again below 2100. If it breaks below 2078, selling pressure will come. For conservative traders, below 2070. Monday closing will tell where it wants to go. Weekly below 2070, we open doors for 2000, and 1930.
Comment:
For the analysis to make sense. Reliance Weekly closing should be below 2000 this week. Let's see if that happens in next 3 trading sessions.