Namaste!
Any stock can not sustain it's bullish behaviour, without a correction.
Reliance has to correct, before going up again. It is the proved nature of markets.
Why selling any stock is a good idea.
1. To buy it back at a lower prices,
2. To full-fill urgent needs of money,
3. To let the weak hands enjoy the euphoria and not to stay in the markets when there is an extreme optimism.
So, I am suggesting a logical price to book profits in Reliance. The price would be Rs 3100. Why?
Look, the people who would have bought at around Rs 1100, will be getting around 2.9 times of there investment amount. Hence, they will be booking profits, resulting in a correction.
Okay, I will be sell it at the above price, but what if I want to buy it again.
A: You have to wait for greater than 15% correction from All time highs, before buying it again. Because, In India, LTCG is around 10%, so you have to get the stock back at 15% or more correction, to compensate for your extra efforts.
Disclaimer: The analysis I have shared is based on my understanding of the markets. Please do your due-diligence and you are solely responsible for your decisions.
Any stock can not sustain it's bullish behaviour, without a correction.
Reliance has to correct, before going up again. It is the proved nature of markets.
Why selling any stock is a good idea.
1. To buy it back at a lower prices,
2. To full-fill urgent needs of money,
3. To let the weak hands enjoy the euphoria and not to stay in the markets when there is an extreme optimism.
So, I am suggesting a logical price to book profits in Reliance. The price would be Rs 3100. Why?
Look, the people who would have bought at around Rs 1100, will be getting around 2.9 times of there investment amount. Hence, they will be booking profits, resulting in a correction.
Okay, I will be sell it at the above price, but what if I want to buy it again.
A: You have to wait for greater than 15% correction from All time highs, before buying it again. Because, In India, LTCG is around 10%, so you have to get the stock back at 15% or more correction, to compensate for your extra efforts.
Disclaimer: The analysis I have shared is based on my understanding of the markets. Please do your due-diligence and you are solely responsible for your decisions.
Comment:
There is also a P/E resistance at 35, from where it had fallen twice (in Jan 2008 and Aug 2020). So considering current EPS of Rs 98.6, it should not be valued at more than Rs 3450. Based on "history repeats itself" hypothesis, Nifty 50 is bound to correct at least 20% from all time highs by Jul 2024, maybe early as well but in 2024. It is fun to study data and history. This is not an investment advice.
Comment:
The separated business, which is Jio financials is effectively valued at Rs 261.85 per share. So, new selling price is adjusted to Rs 2800. I also "think" market correction is due in the year 2024. So, selling before that could be a good idea.
Comment:
The current ruling government of India is trying to keep GDP growth at increased levels. This is because the past 10-12 election data says, the government which didn't increase GDP figures during their 5 year tenure, has lost mostly often. So maybe, the government is motivating RBI "to not hike interest rates", which will increase growth (GDP), but at a cost of inflation. RBI may start hiking interest rates after the Lok Sabha elections are completed. Like I said previously, market correction is due in 2024. It is my opinion and you should consult your financial advisor before investing or trading.
Comment:
New selling price is Rs 2624, its 7% less than Rs 2800 earlier price. I don't have any position and I am not planning to take any position in Reliance. My view may cause you opportunity cost (or loss of opportunity), so do your own analysis and/or consult your financial advisor.
Comment:
Disclosure: I am short on Nifty50 via options for the next year.
Comment:
I expect anyone who is reading my writings to know that there is nothing "certain" in the markets. Neither the %gain on stock nor "out-performance" or "under-performance". There is a risk and opportunity cost involved in both, buying and selling. Selling at any price can often result in "opportunity loss" when the stock moves higher and higher. Human psychology is a culprit here. For e.g. I post any stock which seems undervalued or overvalued to me on tradingview. When anyone makes money on that, they wont appreciate me "a single word". But when they lose or it results in opportunity loss, they are bound to blame me. I don't criticize any person, because I know their psychology has defeated them. At last, there is nothing like "easy money" in the markets. The survival of the fittest holds absolutely true here.
Comment:
One other example of a culprit human psychology. I am short on Nifty50, so I started looking for reasons of market falling. I found that there is a pneumonia outbreak in China recently. It felt me happy because I was short on Nifty50 and it may result in falling market (correction). But, is it humane? Praying to god to make people die, just to make some money in the short position? It felt really bad after realizing this. May be that's why the god made bull markets more often and more lasting (time) than bear markets. Pessimism is short-lived whereas optimism lives longer. Optimism always wins in the long term. Take for instance a glass half-filled with water. You can't get or achieve anything seeing it half-empty. But, you surely achieve something seeing it "half-full".
Trade closed: target reached:
It reached Rs 2624.