RELIANCE : Analysis and Prediction
Timeframe: 1D
Structure: ABC corrective structure within a broader range
Current Price Zone: ~₹1,458
Market Phase: Post-distribution correction from extended retracement highs
🔍 Big Picture Market Structure (Educational View)
Reliance has completed a strong impulsive upmove, followed by profit booking from an extended Fibonacci retracement zone (113%–127%), which is clearly visible near the recent highs.
This behavior is textbook market psychology:
Smart money distributes positions near extended projections
Late buyers enter near highs
Price then corrects to value zones, where demand is reassessed
The chart now reflects a classic ABC correction:
Wave A: Sharp rejection from supply zone
Wave B: Temporary bounce (short covering + dip buying)
Wave C: Ongoing corrective leg testing demand
📐 Why These Levels Matter (Trading Psychology Explained)
🔴 Supply Zone: ₹1,580–1,610 (113%–127%)
This zone triggered strong selling because:
Long-term holders booked profits
Institutions reduced risk at stretched valuations
Breakout buyers were trapped
📌 Extended Fibonacci zones often act as exhaustion points.
🟡 Golden Support Zone: ₹1,398–1,476 (50%–78.6%)
This zone is critical because:
It represents fair value retracement of the prior rally
Dip buyers and positional traders look for re-entry here
Short sellers start covering partially
🧠 Markets frequently pause or bounce here due to a balance between fear (from longs) and greed (from value buyers).
🔵 Lower Extended Support: ₹1,267–1,305 (127%–113%)
If the golden zone fails:
Confidence of dip buyers weakens
Panic selling increases
Price seeks deeper liquidity
📉 This is where only high-conviction buyers step in.
🟢 Bullish Reaction Scenario (Base Case)
If price:
Holds above ₹1,398–1,420
Shows stabilization (small candles / higher lows)
Then:
First recovery toward ₹1,476 (50%)
Further bounce possible toward ₹1,580
Momentum buyers re-enter above broken VWAP zones
📈 This would be a corrective bounce, not a fresh trend yet.
🔴 Bearish Continuation Scenario (Risk Case)
If price:
Fails to sustain above ₹1,398
Closes decisively below this zone
Then:
Downside opens toward ₹1,305 → ₹1,267
Breakdown reflects loss of confidence by dip buyers
Sentiment shifts from “buy the dip” to “sell on bounce”
🎓 Educational Takeaways for Traders
Extended rallies end with distribution, not collapse
Fibonacci levels work because most traders watch them
Corrections test patience, not intelligence
Price reacts where emotions are highest, not where logic feels comfortable
🧠 Trading Psychology Behind This Chart
Zone Trader Behavior
Highs (1,580–1,610) Greed → Distribution
Pullback begins Hope → Dip buying
Golden zone Fear vs Opportunity
Breakdown Panic & Capitulation
📘 Markets move because people react — levels simply highlight where reactions cluster.
🔮 Price Outlook (Educational Projection)
Above ₹1,420: Range-bound recovery likely
Above ₹1,476: Momentum improves, bounce extension possible
Below ₹1,398: Deeper correction toward ₹1,305
Below ₹1,267: Structure turns weak on higher timeframe
🧾 Conclusion
Reliance is currently in a healthy corrective phase after profit booking from stretched levels.
The ₹1,398–1,476 zone is the most important area to watch — it will decide whether this correction ends as accumulation or turns into distribution continuation.
📌 Let price confirm intent; don’t predict emotions.
⚠️ Disclaimer
This analysis is for educational purposes only. I am not a SEBI registered analyst. Markets are uncertain, and I can be wrong. Please consult a financial advisor before trading or investing.
